David Jones sex scandal a “major disruption”

By Keri Algar

SYDNEY, NSW: Australia’s biggest sexual harassment case has been described as a “most unfortunate event” by David Jones chairman Robert Savage in his AGM address to shareholders today.

The chairman also said that a recent review of HR policies and procedures had found only minor areas for improvement, after defending the decision to settle with Krist Fraser-Kirk.

“Some have queried why the Company settled this matter at all. First and foremost…it was a straight risk/return decision. Secondly…the settlement provided the Company with certainty of outcome without the burden of a final hearing. Thirdly, it goes without saying that had we continued with the litigation we would have been faced with heavy ongoing fees,” he said.

Savage described the events beginning with the mutual termination of McInnes, the transition to new CEO Paul Zahra and the resolution of the litigation with Kristy Fraser-Kirk.

“Shortly after the former employee’s complaint was received, Mr McInnes offered his resignation to the Board. In light of the unusual circumstances and after much consideration of all facts available to the company at the time, the Board negotiated a mutual termination of his employment, a payment equivalent to 10 months of his base salary ($1.5 million).”

“As previously announced, the court proceedings with the former employee have been resolved and we are pleased that all parties are able to heal, learn, rebuild and move one.

“The settlement sum of $850,000 included a smaller contribution from Mark McInnes. The Company’s portion of the settlement sum was covered by its insurance policies.

Savage concluded the McInnes statement by reassuring shareholders that measures had been taken to ensure the debacle would not occur again.

Mark McInnes stepped down from his position as CEO in June this year after confessing to improper behaviour towards Kristy Fraser-Kirk, who subsequently lodged a statement of claim in the Federal Court against the department store retailer, seeking $37 million for “misleading or deceptive conduct”.

Related stories:

McInnes responds to "intolerable cruely"

David Jones dips after McInnes' departure

Ex DJs boss vows to take on accuser in court

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