Aberdeen City Council's chief executive has said he knew that two staff members who were alleged to have had sex in an office were having an affair.
Chief executive Douglas Paterson gave evidence
Douglas Paterson told a tribunal he had been aware of a sexual relationship between Brian Woodcock and a senior female member of staff for four years.
He was giving evidence at an employment tribunal of former manager Tom McNeil.
Mr McNeil claims he had to quit after reporting sexual conduct between Mr Woodcock and the female staff member.
Mr Paterson said: "It first arose in 2002 as a result of stories circulating around the council.
"It had got to the stage of a number of directors hearing about it and Mr Woodcock felt he needed to explain the situation to me.
"He told me there was nothing in it."
However, Mr Paterson said that a year later Mr Woodcock admitted the relationship.
The tribunal heard that Mr McNeil, 52, had passed on information to Mr Paterson about seeing the female staff member - who cannot be named - performing a sex act on Mr Woodcock in the office.
It also heard he told the chief executive about hearing them having sex behind a partition in the offices on a separate occasion.
Tom McNeil was a senior employee at Aberdeen City Council
Mr McNeil's representative Frank Lefevre asked Mr Paterson what Aberdeen tax payers would think about employees having sex in council offices.
Mr Paterson said they would be as horrified as him and agreed it was gross misconduct.
Asked why then the female staff member had not been disciplined, Mr Paterson replied: "It was never proved."
Mr Paterson was also asked if he was aware of claims that the female member of staff was promoted and given additional pay because of any relationship.
He said he was but that an investigation had also failed to prove the allegations.
The hearing continues.