Published Monday, 30 July 2012
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The Fair Employment Tribunal found that Dr Alan Lennon, a Protestant, had been subjected to unlawful religious discrimination during the appointment process conducted by the DRD.
The deadline for an appeal against the decision is Tuesday, however UUP minister Mr Kennedy said the department has decided that would not be in the public's interest.
He said: "I have considered the merits of an appeal and I have come to the conclusion that it is not in the public interest.
The Tribunal's finding relates to a specific complaint brought by Dr Lennon and it is not my intention to review any of the appointments made under the tenure of my predecessor.
"Substantial public money has already been spent contesting this case and I have considered the additional significant costs of any appeal in making my decision. Both sides have been funded by public money and this would continue to be the case in further proceedings."
Sinn Féin's Conor Murphy, the former minister, has refuted the allegations of discrimination and said Mr Kennedy's decision is "politically motivated".
The MP added: "The decision not to appeal the findings of the Fair Employment Tribunal's decision in a case brought by Alan Lennon is clearly politically motivated and way of scoring cheap political points at the expense of the truth.
"I understand that this political decision flies in the face of legal advice from a number of sources which challenged the findings and stated that they should be appealed, all off which the Minister was aware of.
"I would challenge the Minister to do this and explain how my decision, which I stand over and have explained publically, is deemed sectarian yet his is not?"
The tribunal last month said it is satisfied that the successful candidate, Sean Hogan, was appointed as chairman of Northern Ireland Water "because he was not from a Protestant background and because he was known to the Minister and his ministerial colleagues".
Dr Lennon was interviewed for the post and was deemed appointable by the selection panel, along with three other Protestant candidates and one Roman Catholic candidate.
Sinn Féin said it has received firm advice from the Attorney General that the case should be appealed - but Mr Kennedy said the prospect of success in any appeal is "at best uncertain".
"The advice I have received and I received substantial and varied advice I believe that that indicated the prospects of an appeal to be uncertain," said the minister.
"I do not believe that that advice legally was compelling advice. An industrial tribunal unanimously decided having heard all of the evidence and they have brought forward a decision in a case that was taken and supported by the statutory agency.
"I believe that therefore it is not in the public interests to proceed."