A Standards Committee found that Heysham councillor Darren Clifford had breached council guidelines by using official council equipment during office hours to send the woman risque emails.
However, they agreed that a full investigation was not necessary.
The council’s own constitution was ‘not clear’ about its requirement to disclose internal relationships, they said.
But it was found that the Labour councillor had misused council equipment and the email system to send intimate emails to the woman.
Human Resources had referred the matter to the Standards Committee after receiving an internal complaint.
The employee, who was a relatively junior member of staff, was subject to a separate internal process, and officers said it was imperative that her identity be protected.
During a disciplinary hearing on Monday, the Standards Committee was told the five-month relationship began last August but is now over and the woman involved is no longer a council employee.
Divorced dad Coun Clifford, who is also chair of Morecambe Town Council, admitted misusing the email system, failing to disclose a relationship with an officer and ‘misuse of officer time’.
He said he had been at fault and had shown a lack of judgement.
The cabinet member for leisure, culture and tourism acknowledged that he should have told the council about the relationship, but the committee found that it was not necessary under their guidelines, although said this would now be re-examined.
They accepted Coun Clifford’s admissions and the committee agreed that there has been a breach in Standards in Public Life and Code of Conduct with regard to the misuse of council equipment and email system and misuse of officer time.
Members agreed that it would be appropriate to remind all councillors of the council’s IT protocol.
It was also suggested that councillors be invited to refresh their Code of Conduct training.
As an elected councillor, Coun Clifford could not be sacked, but the committee could have recommended his removal from any or all committees.
Coun Clifford and council leader Coun Eileen Blamire were both unavailable for comment.