Council compromise agreements at almost £500k in four years (From Bournemouth Echo)

Council compromise agreements at almost £500k in four years

12:00pm Wednesday 11th January 2012 in News By Melanie Vass

'ABSOLUTELY OUTRAGEOUS': Councillor Ron Whittaker

AXED Bournemouth council staff have received almost half a million pounds in “pay-offs” over the past four years, the Echo can reveal.

A total of 35 staff have benefitted from “compromise agreements” since 2008, some worth tens of thousands of pounds.

Compromise agreements are legally binding agreements reached with departing employees. Workers are usually given a severance payment and in return, agree not to take their claim or grievance to an employment tribunal. It also prevents them from speaking out against their former employer.

One of the most recent examples is the departure of Neil Smurth-waite service director for community care who left the council last month “by mutual consent”.

The figures obtained by the Echo under the Freedom of Information Act reveal that he received a total payment of £58,000.

The figures show that a total of £472,543.92 has been paid out in compromise agreements from April 2008 to date. The vast majority of this has been paid in the past two years – £201,902 in 2010/11 and £150,039.61 so far in 2011/12.

Mr Smurthwaite’s payment is the largest individual sum of the whole period.

Other payments include £57,668 to a service delivery manager in 2010/11, £31,828.31 to a technician engineer in 2011/12 and £30,000 to a service and strategy manager in 2008/9.

A programme manager was paid £29,915 in 2010/11, a principal officer £29,062 in 2009/10 and a mortuary supervisor £28,000 in 2010/11.

There are also many smaller amounts paid to more junior staff. In the current financial year, a cook has received £4,591 and an internal communications officer £4,380.

Independent councillor Ron Whittaker labelled the compromise agreements “absolutely outrageous” and said: “I should think this will cause an uproar amongst the residents of Bournemouth.

“We are told there is no money for local projects or good causes yet they can pay staff off to the tune of thousands of pounds. They are buying their silence, that’s all it amounts to.

“I can’t believe someone can be paid £58,000 – to most people that is five or six years’ salary. Many of these payments result from staff disputes, which should just be resolved internally.” But Richard Saunders, HR service director, said: “Compromise agreements are not taken lightly. There have only been 35 in the last four years in an organisation that employs thousands of staff. Each case is individual and various factors are taken into consideration to reach an agreement which is mutually acceptable.

“These agreements are by nature confidential, therefore we cannot go into detail about any individual case.”

Dave Higgins, the Unison representative at Bournemouth Council Unison, said: “It can be a lot cheaper for the council to reach a compromise agreement with a member of staff rather than go to a tribunal, where they could end up paying out the same amount but also end up with high legal costs and bad publicity. And it’s often the preferred alternative to redundancy because then the council would not be able to fill that post again.

“The only thing we would say is that if there’s a problem between a manager and a member of staff you need to address that. You cannot just keep on paying compromise agreements, you need to address the problem.”

Avoiding an employment tribunal

Lesley Walford, head of the employment department at the Bournemouth-based law firm Ellis Jones, said compromise agreements were the only way employers could prevent an employee from bringing a claim against them at an employment tribunal.

They involve the employee compromising their legal rights, hence the name. All employees offered a compromise agreement are required to seek independent legal advice, which their employer pays for.

She said: “I probably advise on roughly 200 a year and the local rate for advising on a compromise agreement is around £300 plus VAT.

“I would say they are becoming increasingly common. The benefit for the employer is they get a guarantee the employee will not go to a tribunal. And it can be possible to negotiate a good settlement deal for the employee, depending on the circumstances.”

Research carried out by the Chartered Institute of Personnel and Development (CIPD) found that more than half of companies have used compromise agreements in the past two years as a way of resolving workplace issues.

The major reasons cited for using compromise agreements are to remove an employee on the grounds of poor performance or misconduct, to avoid legal challenge in redundancy situations and to make it easier to remove senior staff without embarrassment.