A former High Court judge has been appointed to investigate questionable changes to employment contracts at the New South Wales Government-owned energy corporation Macquarie Generation.
The company's chief executive Russell Skelton and human resources head Sharon Howes are stepping aside while former judge John Dyson Heydon QC conducts the inquiry.
Mr Dyson Heydon will examine what are being described as potential breaches of internal practices and Government policy at the corporation.
The inquiry is being conducted as the State Government is in the process of selling off Macquarie Generation's assets.
It is understood that contracts for a small number of employees appear to have been altered, without the knowledge of the Macquarie Generation board, to improve the benefits they would receive in the event of a sale.
NSW Treasurer Mike Baird says he expects the investigation to be thorough and independent, but he does not think it will affect the timing of the sales process.
"The O'Farrell Government expects this inquiry to be a thorough and independent examination of all relevant issues," Mr Baird said in a statement.
"So as not to prejudice Mr Dyson Heydon's investigation, I will await the outcome of the independent inquiry before making any further comment."
The Opposition is demanding to know if the Treasurer has referred the allegations to the Independent Commission Against Corruption.