External auditors have been called in to investigate how the former chairman of Swindon's education committee was illegally offered a job at a school in the borough.
The law states that there must be a 12-month gap between a councillor's period of office and any subsequent direct employment.
Jo Garton, now parliamentary Labour candidate for North Wilts, lost her seat in the May council elections.
A qualified teacher and mother of two young children, she worked in a Berkshire school before a successful interview with the governors at Lethbridge Junior School in June.
She started teaching at the Old Town school in September this year, four months after losing her Dorcan seat.
Ms Garton said: "I asked senior officers if it would be all right for me to teach at a Swindon school and was told it would be.
"I thought there might be a problem if I had worked in the education department and that is why I asked for the advice.
"I have acted in good faith and as far as I am concerned got the job on merit.
"It was not as if it was difficult for me to get a job, I had a lot of offers."
The issue was raised by Tory group leader Mike Bawden with Swindon Council chief executive Paul Doherty after it was brought to his attention.
Coun Bawden (Old Town and Lawns) said: "Ms Garton says she acted in good faith after asking for advice from senior officers and I have no problem with that. But what worries me is that senior officers earning good salaries seem not to know the law."
Liberal Democrat leader Mike Evemy (Eastcott) said: "At the moment I am keeping an open mind, but I think serious questions may be asked of the officers. It was no secret that she had got the job, and while some of us may be a little hazy about the law on this subject one does not expect that of senior officers."
Ms Garton is expected to continue working at the school through an agency, which is allowed under Government rules.
Council Chief Executive Paul Doherty said: "This has been an important technical and legal issue for the council to resolve.
"Now that the issue is resolved I have asked the council's external auditors to complete a full independent investigation into the circumstances of this case so that all the facts are known and shared with elected members and we can learn all we need from this incident."
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