Guerra was moved on by Melbourne’s board after it decided he was not up to the task of leading the club, with the former VECCI boss saying he was “puzzled” by the decision.

It is understood he was offered a six-month payout by Melbourne under the terms of his contract, with most AFL CEOs paid between $500,000-$800,000.

But the Herald Sun has confirmed he has filed a claim against the club through the Fair Work Act.

Melbourne said in a statement provided to this masthead on Sunday: “The Melbourne football club stands by its decision to part ways with Paul Guerra due to a loss of confidence in his ability to lead the club. The club will make no further comment at this time.”

The Guerra claim is expected to exceed $1 million.

The Demons have already reached a financial settlement with Sachi Dade, the partner of Steven May, over a privacy issue after the club discussed inappropriate personal information over a Microsoft Teams meeting.

May has also initiated legal action over the same issue, and has already received a hefty payout after the club decided to cut ties with him over summer.

Despite the off-field turbulence the Demons have marched to a 15-8 win-loss record under new coach Steven King, but the loss to the Western Bulldogs on Saturday put them into a knockout wildcard final against Carlton.

Melbourne president Steve Smith played a part in the hiring of Guerra but it quickly became apparent the pair were not compatible.

We think we just got this one wrong, and it is time to move on. There was no one particular thing, but it was just a general loss of confidence in his ability to lead the club and a breakdown of relations with the board,” Smith said about the reasons for moving on Guerra.

“It was a difficult decision for us to make; it wasn’t treated lightly, and basically, as a board, we had to go through the information that was available to us, and we were unanimous in deciding it was time to move Paul on.”

The club hired media executive and board member Dan Taylor as Guerra’s replacement after Brian Cook became the acting chief executive for a matter of months mid-season.

A preliminary hearing is set down for October.