Work contract changes inquiry at Macquarie

The chief executive of one of the NSW government's largest businesses, Macquarie Generation, has been forced to step aside following possible breaches of his authority as the government prepares the business for sale.

A retired High Court judge, John Dyson Heydon, is to conduct an inquiry into the apparent changes to the employment contracts of senior staff, which were made without the knowledge of the board or the government.

The surprise development comes as the state government is preparing to open a data room relating to the privatisation of the electricity generator, which operates two power stations in the Hunter Valley.

Mr Heydon is to review the work contracts relating to several senior staff.

The contracts appear to include more generous provisions than approved by the government if the company is sold.

All staff at state-owned power companies have a standard provision to receive up to 30 weeks' pay if the company is sold, depending on their length of service. The provisions that appear to have been changed for many senior contract employees relate to transfer payments, termination notice periods and redundancy terms if the staff decide not to transfer to the new owner of the business.

"Chief executive Russell Skelton and general manager human resources Sharon Howes will step aside from their regular duties while the inquiry is under way," NSW Treasurer Mike Baird said on Monday.

"It is not expected that the inquiry will impact the timing of the Macquarie Generation sales process."

In a separate statement, the board of the generator said it was seeking to clarify "how these changes were made without board knowledge or approval; and whether the changes made to employee contracts are lawful".