An independent inquiry into the sacking of former education director Keith Price Davies two and a half years ago found that Carmarthenshire CC failed to treat him fairly and did not follow its own procedures on redundancy.
Carmarthenshire CC was told by the employment tribunal to pay Mr Davies£50,000 - the highest amount of compensation possible for unfair dismissal - on top of£61,000 in officers' time and legal fees.
The council has approved a series of new procedures drawn up by chief executive Mark James to prevent similar cases occurring in the future.
Any individual believed to be biased for or against a certain candidate will be excluded from the interview process.
'The council must conduct an open and transparent exercise where staff restructuring may lead to redundancies,' said Mr James.
'It is now time to draw a line under this matter, which has been a huge distraction from the main business of the county
The affair began when Carmarthenshire combined community services with education in a departmental structure shake-up, forcing Mr Davies to reapply for his own job.
Mr Davies - who had been subject to a disciplinary investigation over a£1.1m overspend in the non-delegated education budget - won an unfair dismissal claim after failing to be shortlisted for the position.
The inquiry dismissed allegations of conspiracy, but criticised council leader Meryl Gravell (Ind) and former chief executive Bradley Roynon for their roles in the affair.