A regional Victorian council has been sacked after a report detailed a history of dysfunction, including a toxic workplace culture, asbestos dumping, dodgy procurement,  capital project mismanagement, OH&S failures and the murder of a manager by an employee.

Moira Shire Council is in the hands of an interim administrator following the tabling of what local government minister Melissa Horne called a ‘deeply disturbing’ report.

The report from a Commission of Inquiry into the council, tabled on March 7, describes “a catastrophic governance failure” at Moira Shire.

Ms Horne said she had accepted the commissioner’s recommendations to dismiss Council until 2028.

“The issues identified in the commissioners’ report, including the council’s abject failure to make decisions and take appropriate action that ensured the health and safety of employees and residents, failure to provide adequate community representation and major procurement breaches and mismanagement of key capital works, demonstrate extremely serious governance failures warranting the dismissal of the council,” Ms Horne told parliament.

The Commission has also referred information relevant to the August 2021 murder of Moira’s Manager of Operations Rick Devlin to the state coroner.

Other matters, including the alleged transfer of asbestos-contaminated soil to unlicensed waste stations, have been referred the state’s corruption watchdog IBAC.

Murder of a manager

Mr Devlin, who ran the depots and the outdoors workforce and was the highest paid manager below executive level at Moira Council, was fatally shot at his home by an employee, Andrew Robert Paterson, on August 5 2021 in what the court heard was a revenge attack over a workplace dispute.

Paterson has admitted to the murder and been sentenced to jail.

The Commission would expect that any Chief Executive Officer confronted with the murder of one employee by another, would make every effort to be thoroughly briefed … about the work environment of those employees.

Moira Commission of Inquiry

The report said Paterson was stood down after being set-up by co-workers for stealing a small amount of kerosene from the Nathalia works depot, which is described in the report as “the epicentre of a bitterly divided workforce riven by victimisation, threats, bullying, harassment, accusation and counter accusation”.

The environment at the depot was ‘fundamentally unsafe’, the report said.

“It broke some men who went on to long term Workcover and drove others to resign. The few women employed in the depots also suffered harassment and abuse with little done to protect them.”

It was in this environment that the events leading to Mr Devlin’s death “played out without any constructive intervention by Council administration” the report says.

“Had these events not occurred, it is questionable whether the subsequent course of events would have transpired.”

Historical problems

The report said governance at Moira Shire Council had been steadily eroding over most of the last ten years.

In April 2022 a municipal monitor, Marg Allan, was appointed to review governance processes at the council.

Ms Allan identified serious concerns including that Moira Shire Council had numerous governance issues, a poor organisation culture, with alarming reports of staff safety and culture, and poor community engagement practices and financial management of capital works.

CEO ‘failed in duties’

The Commission of Inquiry also found Moira’s CEO Clare Keenan failed in her duties.

Ms Keenan told the Commission that her “take” on the murder of Mr Devlin was that Paterson “was somebody that had personality problems” and that she didn’t see any problem at the Nathalia depot.

“The Commission would expect that any Chief Executive Officer confronted with the murder of one employee by another, would make every effort to be thoroughly briefed … about the work environment of those employees,” the report says.

It says the failure to ensure a safe and healthy environment in the depots has been compounded by an “abject failure” since the murder to attempt to bring about any cultural or behavioural change.

Ms Keenan, formerly the CEO of Burke Shire in the Gulf of Carpentaria, had also viewed the monitor, Ms Allan, as a threat to her role as CEO, and accused her of being “petty and biased” and a “third tier bureaucrat”.

Ms Keenan told the commission she had been angry when she sent the email and needed to “get it off her mind” so that she could get to sleep.

The commission said it was “difficult to comprehend” that such an inexperienced CEO was first appointed to the role, and then given an increase in salary and a contract extension within the probationary period.

Ms Keenan remains CEO at Moira Shire. In a statement to Government News she said the wellbeing of staff was a priority for Council.

“Immediately after the incident occurred we implemented a range of measures to ensure we were providing our staff with every possible support, which we will continue to do,” she said.

Council would review the Commission’s findings and seek relevant advice before making any further comment, Ms Keenan said.

OH&S failures

The report says council faces a blowout in workers comp claims and premiums as a result of the “neglect of its occupational health and safety responsibilities and the wilful misuse of flawed disciplinary processes against its employees”.

It saw a staff turnover rate of about 18 per cent in 2021-22.

“The Commission discerned a well-established pattern in which the accused employees were stood down without properly disclosing the allegations against them,” it says.

“External investigations were commissioned, and were often protracted, resulting in employees claiming WorkCover until eventually resigning.”

Council’s Workers Compensation claims are predicted to increase from $130,000 in 2020-21 to $811,000 in 2021-22 and to $2.25 million in 2023-24.

Council’s Workers Compensation premium is predicted to increase from $265,000 in 2020-21 to $362,000 in 2022-23 and to $495,000 in 2023-24.

Moira Shire Council has been ordered to meet the costs of the Inquiry.

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