Mr Mallett will depart council at the end of this month.
MRC’s acting chief executive officer Brian Barrett acknowledged Mr Mallett’s work over the past two-and-a-half years.
“It has been a difficult job bringing together staff from our two legacy councils, Wakool and Murray Shire,” he said.
“Mr Mallett has worked tirelessly at improving our governance oversight, financial stewardship and support systems to enable the new Murray River Council to operate efficiently over multiple sites.
“His expertise has been invaluable.”
The resignation comes after about 100 MRC staff had voted for a motion of no-confidence in Mr Mallett in July.
At the time, United Services Union organiser Brian Harrington said the motion addressed issues including Mr Mallett's lack of communication with staff and his handling of the council restructure, accusations denied by Mr Mallett.
MRC has now asked workplace health and safety regulator, Safework NSW, to investigate whether public comments made by Mr Harrington in relation to Mr Mallett, constitutes public bullying.
“I met with Mr Harrington regarding his comments and he acknowledged that the only example of alleged bullying by Mr Mallett didn’t even get close to meeting the required definition,” Mr Barrett said.
Mr Barrett said councillors and employees are legally required to comply with a code of conduct which prohibits them from making allegations of suspected bullying and other alleged breaches of the code of conduct in a public forum.
Further, alleged breaches of the code of conduct are required to be dealt with in accordance with prescribed procedures which provide a degree of protection from false and/or unsubstantiated claims.
Union officials are not covered by the code and if they make false or unsubstantiated claims against council staff, there is little the staff member can do to protect themselves.
“It is disappointing that a union would attempt to publicly destroy the reputation of someone knowing those claims are not correct,” Mr Barrett said.
“Put simply, this is a case of the pot calling the kettle black.”
The United Services Union denied the allegations made by Mr Barrett and declined to make further comment.
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