Sources had told the BBC that an investigation allegedly did not stand up the claims.
In the Senedd, David said that the allegations aired by the BBC “were not proven, and in fact were proven to be spurious and vexatious”.
“The working relationships then would be very difficult to repair and, in fact, a disciplinary investigation might have been appropriate.”
Calling the former chief executive an “errant” officer, David said a disciplinary investigation and the risk of a tribunal would have added “increasing costs to the council that go way beyond the £209,000 it cost to pay her off”.
“This is a problem in the system. It is not a problem for the leadership of the council. They have acted in the public interest by gaining a dismissal in this way, and they’ve done the right thing.”
He said the Welsh government had agreed in 2020 to look again at the process by which the designated independent person process is run, and a review had produced recommendations. David added: “Following that, nothing else has happened.”
Welsh government business minister Jane Hutt replied that it was not appropriate for her to comment.
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