Ms Potter took up post as interim chief executive in January 2020 and was formally appointed to the permanent role in September 2020.
There were calls for her to step down earlier this year over the board’s handling of the case.
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Ms Peggie, an A&E nurse, is suing her employer and Dr Beth Upton after she was suspended for objecting to the transgender medic’s use of the room at Victoria Hospital in Kirkcaldy on Christmas Eve 2023.
The words exchanged in the incident are disputed. In her evidence to the tribunal, Ms Peggie said she told Dr Upton that he was a man and should not be in the female changing room. She said she was “trying to give [Dr Upton] an example of how I and other women feel”.
According to Dr Upton’s testimony, Ms Peggie said: “This was the women’s changing room and she told me that it was inappropriate for me to be in there.”
Dr Upton told the tribunal the exchange left them feeling “really, really upset”.
Ms Peggie claims she faced discrimination and harassment as a result of having to share female changing facilities with a male colleague.
NHS Fife argues that while Ms Peggie is entitled to her belief that Dr Upton is male, the way in which she confronted her colleague was unreasonable in a workplace setting, and that it was therefore reasonable she was suspended and investigated.
It is understood the legal teams are expecting a judgment in late November or early December.
In a statement, the board said Ms Potter had “steered NHS Fife through one of the most challenging periods in health and social care”.
Ms Potter said: “As I prepare to retire, I remain deeply committed to NHS Fife and confident in the strength and resilience of the organisation.
“Our leadership framework and values-led culture are now firmly embedded, providing stability and clarity during this transition.
“We have also made important progress in strengthening our financial sustainability, with strong governance and focused transformation laying the foundations for long-term improvement.
“I leave knowing NHS Fife has dedicated leaders, a clear direction, and a culture of continuous learning, giving me complete confidence in its future and its ability to continue delivering high-quality care for the people of Fife.
“After more than 30 years in the NHS, I feel the time is right to hand over to a new chief executive who will continue to build on this strong foundation.
“I would like to thank staff across NHS Fife for their professionalism, compassion and unwavering commitment to our patients and communities.”
Earlier this year, Scottish Tory leader, Russell Findlay called for Ms Potter to resign, along with the authority’s board.
He said if they refused, the Scottish Government should step in and sack them.
The MSP described the tribunal as an “ongoing slow-motion car crash”.
Last month, we revealed that John Swinney has personally requested a briefing from NHS Fife after the board issued a controversial press statement.
Emails released to The Herald under Freedom of Information show that the Scottish Government was monitoring the fallout from NHS Fife’s July 18 statement, which was issued while the tribunal was sitting.
The 1,700-word release, which sought to address what the board described as “misinformation” surrounding the case, was later repeatedly amended following criticism from the tribunal and the Scottish Information Commissioner.
The health board’s initial statement appeared to link threats of violence against NHS staff to Sex Matters, the gender-critical campaign group supporting Ms Peggie.
David Hamilton, the Scottish Information Commissioner, described it as “petulant” and also said it “cast doubt” on previous assurances over its handling of Freedom of Information requests.
He even warned the board could face contempt of court proceedings in the Court of Session.
Maya Forstater, CEO of sex-based rights charity Sex Matters said: “The Equality Act is designed to protect employees and their managers from being forced into impossible situations where they face harassment and discrimination.
“Sandie Peggie should never have been put in a position where she was alone, late at night with a male colleague in the women’s changing room, arguing for her basic rights. Nor should she have had to go to tribunal.
“It was not senior managers who faced the prospect of being forced to undress with members of the opposite sex, or of being cross-examined in court. Carol Potter presided over an organisation that did not take care of its staff, but instead left a young, inexperienced graduate to “Google it” when asked about employment law.
“Responsibility for ensuring that all policies are lawful and do not result in harassment or discrimination rests ultimately with the chief executive, and in NHS Fife the chief executive failed in this essential task.”
