The dispute over wages due to the racecourse manager at Musselburgh Racecourse cost his bosses ten times the amount in dispute.
Bill Farnsworth, general manager at Musselburgh, took the committee which oversaw the course to an employment tribunal after they deducted nearly £10,000 from his salary, saying he had been overpaid. The course is owned by East Lothian Council.
The case, which was due to go ahead last month, is understood to have been settled by both parties last month.
However, it is being claimed by a former member of the Musselburgh Joint Racing Committee (MJRC), which ran the racecourse at the time of the wages dispute, that the case, which dates back to 2013, has cost the council over £100,000.
East Lothian Council has denied the claim.
Group Captain John Prideaux, who sat on the committee as the chairman of Lothians Racing Syndicate, is calling for an investigation into the actions of councillors who sat on the committee, by the Standards Commission and Audit Scotland.
He said: “The conduct of various councillors has been irresponsible and scandalous.
“The final legal bill from this saga alone, which comes out of racecourse finances, will most likely exceed £100,000.
“These funds should have been spent maintaining and improving the racecourse, which would have also benefited local small businesses and contractors in East Lothian.”
Musselburgh Racecourse was run by MJRC, made up of four East Lothian councillors and three members of Lothians Racing Syndicate until it was disbanded in 2018.
The committee was plagued with problems as internal disagreements flared between councillors and the racing representatives, leading to the British Horseracing Authority (BHA) demanding an independent inquiry into its governance.
This led to the Musselburgh Racing Associated Committee (MRAC) being established by the council, with four councillors and two racing experts, amid plans to find a third-party operator to take over the running of the course.
Chester Race Company was due to take over at Musselburgh this week, but final contracts have been delayed in the wake of coronavirus.
It was alleged that during 2013 and 2014, Mr Farnsworth received additional payments for his role as a director of the BHA.
MJRC decided he was being overpaid and deducted money from his wages, which Mr Farnsworth claimed was illegal.
It is understood the committee took back about £9,500.
Mr Farnsworth is unable to comment on the settlement which has been reached.
However, Mr Prideaux said the racecourse manager had the full support of Lothians Racing Syndicate throughout the dispute.
He said: “I’m delighted for Bill and his family, who have been placed under wholly unnecessary financial and emotional stress by this and other governance episodes over several years.
“He had the wholehearted backing of the LRS, who would have been supporting witnesses at the employment tribunal, and his decision to stand up to the East Lothian councillors has been fully vindicated.
“The council settled this at the very last minute because there was no case to answer.”
An East Lothian Council spokesperson said: “While we will not comment further on matters alleged by a former committee member (the committee being the employer) regarding an existing employee, the claims being made are not correct.
“We can confirm that the private business of MJRC / MRAC has been conducted properly at all times with all appropriate procedures having been followed in this regard.
“We would also add that there have been no legal disputes between the council and Lothians Racing Syndicate Ltd.
“Enquiries regarding employment tribunals can be pursued by consulting the register of employment tribunal decisions, which is freely available online for inspection.”
Marie Sharp is the Local Democracy Reporter for East Lothian. The Local Democracy Reporting Service (LDRS) is a public service news agency : funded by the BBC, provided by the local news sector, and used by qualifying partners. Local Democracy Reporters cover top-tier local authorities and other public service organisations.