“The key point here is there has been no direction to (Investment NSW CEO) Amy Brown about who she should employ,” Ayres said.
He said he did not have the power to “direct” Brown on employment decisions, but conceded that there would always be “discussion and engagement” about such high-profile decisions.
“I have not done anything wrong,” he said.
“There is no reason for me to stand aside.”
Ayres is under fire for his handling of the former deputy’s appointment, following accusations he used discussions with Brown to promote Barilaro’s standing as a candidate.
He rejected that accusation, saying he was only receiving updates of the process.
“I will continue to say this over and over again. A secretary or a head of an agency updating a minister is not a minister meddling or engaging or directing a person on how to do their job,” Ayres said.
“I do not have the legal capacity to do that.
“The CEO of Investment New South Wales is a highly qualified and highly credentialed public servant who does a great job.
“I have full confidence that they will make the decisions to employ the right people in the best interests of New South Wales.”
Barilaro was awarded the $500,000-a-year job of US trade commissioner ahead of credentialed bureaucrat Jenny West.
He has since withdrawn from the role, citing media attention.
Mark Connell, in a written submission to the inquiry, claimed the conversation took place in April 2019 when Barilaro was the NSW trade minister.
He said ministers responsible for trade and investment, including Ayres and then treasurer and now Premier Dominic Perrottet, held a meeting.
“After this meeting, Mr Barilaro came directly to my office,” Connell wrote in the statement.
“He said, ‘I’ve just come from a meeting with Dom and Stuart regarding trade and we’re going to bring back the Agent General in London as well as a bunch of other postings around the world’.
“He then stated, ‘This is it; this is the job for when I get the f— out of this place.'”
Barilaro has rejected the claims.
In a statement, Barilaro said: “The conversation he has recalled is fictitious, false and only serves as a reminder as to why we had to part ways.
“If this inquiry is genuine in its intent to understand the process and the truth by which I was appointed, then surely I would be called up to provide this detail immediately.
“The continued drip feed of select information from the inquiry into the public domain goes against all procedural fairness.”
The ongoing furore around Barilaro’s appointment comes amid more cabinet chaos for the premier, following the sacking of NSW Small Business and Fair Trading Minister Eleni Petinos after reports of alleged “serious bullying”.
Reports on Friday claimed she used the words “retard” and “stupid” towards staff while “yelling and swearing”.
Perrottet on Sunday night confirmed he had sacked the minister.
“Today I spoke with the Minister for Small Business and Fair Trading Eleni Petinos after some further matters concerning her were brought to my attention,” he said.
“In light of these matters, Ms Petinos’ service as a minister will cease with immediate effect, and I will write to the governor in this regard tomorrow.
“Minister for Customer Service and Digital Government Victor Dominello will assume Ms Petinos’ portfolio responsibilities.”