Department for Regional Development discriminated against candidate
The Department for Regional Development has lost a religious discrimination case at an industrial tribunal.
It found evidence by Sinn Fein's Conor Murphy "implausible and lacking credibility".
The case was brought by Alan Lennon, a Protestant overlooked for the post of chairman of NI Water.
Deciding Mr Lennon was discriminated against, the tribunal believe Mr Murphy - minister at the time - also broke the code of practice for appointments.
In March 2011, Mr Murphy appointed a Catholic as chairman, Sean Hogan, ahead of four others shortlisted after interview, all of them Protestants.
According to the tribunal, Mr Hogan was selected because "he was not from a Protestant background and because he was known to the minister and his (then Sinn Fein) ministerial colleagues", Michelle Gildernew and Caitriona Ruane, who were consulted about the appointment.
The BBC has seen the 26-page decision issued to those involved.
It concluded: "The tribunal is in considerable doubt as to whether the merit principle was adhered to by the minister and whether Mr Hogan was the best candidate."
It also said Mr Murphy had added new criteria to the selection process "in order to secure Mr Hogan's appointment", something it viewed as a breach of the code and procedures for appointments.
The tribunal disputed Mr Murphy's claim he was unaware of the religion of the candidates.
"In the reality of the political and religious environment in Northern Ireland, the tribunal finds the minister's evidence is implausible and lacks credibility."
The tribunal also said that during Mr Murphy's time as DRD minister - between 2007-2011, there was "a material bias against the appointment of candidates from a Protestant background".
The findings added: "The tribunal is concerned that Dr (Malcolm) McKibben as permanent secretary with DRD and currently head of the NI Civil Service was not more aware of the situation."
The tribunal rejected Mr Lennon's claim there was also political discrimination, saying there was "a paucity of evidence".
A statement released by the Office of the First Minister and Deputy First Minister (OFMDFM) on Thursday evening, said: "Dr McKibbin took up appointment as Permanent Secretary in DRD in August 2010. In February 2011, one month before the Northern Ireland Water Chair interviews, Dr McKibbin received a copy of the latest OFMDFM Annual Report into Public Bodies and Public Appointments which covered 2009/10.
"The information in this report did not warrant a conclusion that there was a religious discrimination problem with DRD appointments."
Mr Lennon's case was assisted by the Equality Commission.
Its chief executive Evelyn Collins said: "We supported this case because it is our view that the standards of fairness and non-discrimination that we expect in employment situations should apply equally to all public appointments.
"A key part of this is the requirement for a sufficient degree of transparency and accountability in the process to assure people that selection is based on merit and that, if unlawful discrimination occurs, it can be challenged."
The DRD said in a short statement it would take time to consider the ruling.
In a statement Mr Murphy said: "I absolutely refute any allegation of discrimination against Alan Lennon on religious grounds.
"I stand over all of the appointments I made as the regional development minister and adhered to all the set criteria for such appointments.
"The department have six weeks to decide whether to appeal this ruling. Having read the ruling myself I would be urging the department to utilise the appeals process."