With all the media attention focused on the mess it appears the BBC & Newsnight have got themselves into, many people are questioning the £450,000 exit package that George Entwistle appears about to receive. How can failure be so richly “rewarded” is the question on a lot of lips we are sure. We also wonder how the details are so publicly known in what is we assume a confidential “compromise agreement” situation?
That aside, these pay offs seem all too common and you may query why organisations don’t simply follow their disciplinary procedures in matters involving senior employees?
The answer is that in reality and particularly with senior employees on very long notice periods often it is quicker, simpler, more economic & more advantageous to both parties to reach an exit settlement than to follow a disciplinary process. In many cases perhaps a business has lost faith in a senior manager or director but that employee has not actually committed misconduct, an offence or offences that would warrant instant dismissal. A lengthy drawn out disciplinary procedure would not serve the business well and reaching a compromise agreement can become a favoured option.
This isn’t just for the fat cat bosses of big corporations though. Any business of any size with any number of employees can consider such an approach with any one of those employees in some circumstances (but not necessarily need to offer the £450k settlement!) but should do so with caution and get proper advice before even starting a conversation with the affected employee.
The aim in reaching a compromise is to ensure that there can be no legal redress at tribunal, and usually stipulates very strict confidentiality clauses for both parties to protect the reputation of both employer & employee. In ensuring this outcome can be reached the process needs to be managed carefully so we urge taking legal or HR advice before considering beginning down this route.