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TDSB education director Donna Quan speaks during the public portion of a trustees meeting Wednesday evening in Toronto.

Mark Blinch/The Globe and Mail

Trustees of the Toronto District School Board are looking at either breaking the top-ranking staffer's employment agreement by cutting education director Donna Quan's salary, or running afoul of the province's wage-freeze legislation by leaving her contract intact.

Trustees debated those choices on Wednesday evening during a lengthy private meeting that ended after midnight without a resolution, school board sources say.

Trustees had their first opportunity at the meeting to see Ms. Quan's employment contract, which former chair Chris Bolton unilaterally negotiated and approved. He resigned in June, five months before his term ended, leaving trustees to deal with the fallout, including the fact that the contract ignores an edict from Education Minister Liz Sandals to freeze the director's compensation.

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TDSB staff have said Ms. Quan is paid $289,000, which is $17,000 more than her predecessor. Ms. Quan's salary is confirmed in a letter to her from Mr. Bolton that is attached to her employment contract, the sources said.

Board chair Shaun Chen acknowledged in an interview on Thursday that the contract poses a challenge for trustees, but he said they are determined to resolve the matter with the help of legal counsel.

"I think the board is absolutely ready to do what it needs to do, which is tackle this issue with a deep sense of rigour and responsibility," he said.

Mr. Chen said he received a letter from Ms. Sandals on Wednesday reiterating that the director's salary does not comply with provincial wage-freeze legislation. The letter stipulates that under the legislation freezing compensation for public-sector workers, Ms. Quan should be paid $272,000, the same amount as her predecessor, Chris Spence.

Ms. Sandals stops short in her letter of ordering trustees to reduce the director's pay. Mike Semansky, a spokesman for Ms. Sandals, said in an e-mail to The Globe and Mail that, "it is ultimately the responsibility of trustees to decide how to resolve the issue."

The lack of direction from the minister makes it more challenging for trustees, said one of the sources. "Do we follow the minister's directive [regarding the wage-freeze legislation] and lower her salary? If we do that, are we breaking her contract?"

Ms. Quan provided her contract to Mr. Chen last week. His predecessor, Mari Rutka, had failed to obtain a copy despite repeated efforts. Mr. Chen could not explain why the director changed her mind.

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Asked during the public portion of Wednesday's board meeting why she gave her contract to Mr. Chen after stonewalling his predecessor, Ms. Quan told The Globe and Mail without elaborating: "The request has a process to follow … and that process now has been followed."

Tensions between Ms. Quan and several trustees came to a head over her refusal to release her employment contract and led the Education Minister to appoint education consultant Margaret Wilson last month to investigate issues at the board.

Ms. Wilson's report will be released the week of Jan. 12.

Controversy has swirled around Canada's largest school board for several months over decisions by staff, revealed in The Globe, including a $200,000 payment to a food-services company and education partnerships in Asia.

Mr. Chen is vowing to make the board more open and transparent.

"I took the initiative to ask the director for her contract," he said in the interview. "For me, it's a matter of public interest. There has been tremendous concern expressed around the director's contract."

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