Academy chains defend ‘golden handshakes’ of up to £50k for staff dismissals

Academy chains have defended paying out £1.6 million on “golden handshakes” to staff after taking over struggling schools, writes John Dickens.

A Schools Week investigation can reveal the country’s 12 largest academy chains have shelled out the seven-figure sum in 2014/15 alone.

Costs for the previous year touched nearly £1.9 million.

But it isn’t just the large chains paying out big sums. For instance, Bright Tribe multi-academy trust paid out nearly £240,000 in 2013/14 – its first year of operation. The trust now has seven schools, but has yet to file accounts for last year.

The figures seem to relate more closely to the number of schools a trust takes over in a year, rather than overall size.

Schools Week found three of the country’s largest trusts spent more than £250,000 last year alone on these specific severance deals, which are non-contractual and non-statutory.

The deals – also called special severance or ex-gratia payments – are paid as compensation for cancelling an employee’s contract.

Payments are usually made to put off the employee from taking the matter to a tribunal.

The Education Funding Agency (EFA) has strict rules on handing out such deals. Trusts have to put together a business case for every pay-out, which the agency can demand to see so it can check value for money.

Official guidance also states these types of special severance pay-outs “must not be made to staff with poor performance”.

The Harris Federation paid out £283,739 last year, up from £206,551 in 2014. It was the largest combined pay-out for all the trusts analysed by Schools Week.

A Harris spokesperson said the trust grew from 27 to 35 schools during the two years. “In making severance payments, we always seek to fulfil our obligations
towards our staff while minimising costs to protect our budget for education.

“We employ 3,000 staff and severance payments are unfortunately inevitable.”

The total pay-outs at David Ross Education Trust increased from £165,000 in 2014 to £282,000 last year.

A spokesperson said the trust grew significantly in that time and 17 payments in 2015 were made to staff out of more than 2,200.

“Such payments are only made in exceptional circumstances, and only when it is in the best interests of the trust to do so,” he said.

Harris and the Academies Enterprise Trust (AET) both paid a single employee just under £50,000, both in 2014/15.

Trusts must get approval from the secretary of state for any compensation deals that are more than £50,000. They have to submit details of “how the situation came about”, the “management procedures the trust followed” and the probability the school would win in any resulting tribunal if the sum was not paid.

The trust’s accounting officer also had to confirm they took appropriate legal advice, that the transaction represented value for money and was affordable.

An AET spokesperson said: “We do not comment on individual settlements. However, we can confirm that the payment was approved by the EFA.”