Settlement or Systems?

When is good HR, great HR? Having worked in the public sector for most of my working life, and the vast majority within education, it is hard to reconcile just how few of these institutions recognise the need for ‘great HR’. As schools moved away from Local Authorities and into the midst of confusion that was conversion to Academy, expertise became more fragmented. With the relentless squeeze on budgets due to shifting sands in terms of government funding, Headteachers and CEOs had to make (and continue to have to make) increasingly difficult decisions. Do they invest in a new teacher who delivers outstanding teaching and learning to their students, or do they hire the very best leader to lead and manage all of their support staff areas? Let this question sink in. Even the very best leaders in education know this is a tough choice to make, and yet so many will feel forced to make their savings in the very areas that need that extra sparkle of magic and grit. 

HR practised well should bring those savings that allow you to make those very decisions. Businesses and in particular schools, can, and should have it all. Our next generation deserves this and more. They deserve for the funding to be spent directly on each and every one of them, and this happens more when you have the strength and expertise behind all of your business areas. 

Let’s set the scene: a disgruntled employee, a future employee relations issue, a tribunal system now set up to favour the employee (who has nothing to lose by lodging a case), a maverick leader who feels that due process need not be followed, and all of a sudden the organisation is thrust into an external process that is anything other than predictable. There is a risk to reputation, there are costs associated with legal representation and staff time, and ultimately it proves to be a painful process for all involved (even more so should you lose the case). Many leaders choose not to take this path, instead opting for what they feel is a more economical way of resolving matters; a settlement agreement. Sometimes these settlements are negotiated way before the ACAS and tribunal stage, and yet many feel they are an acceptable practice – legal teams use the phrase ‘economic settlement’. When facing a potential reputational risk, many decide to take this route as an easier way out, or dare I say it, as a way of cutting the proverbial dead wood. 

Yet now more than ever is the time to be brave, take action and evaluate the many costs associated with settlement agreements. Despite the requirement to report settlement agreement sums (of a certain level) to the ESFA, very little information is readily available as to the widespread scale and cost. However, one research paper conducted by Darwin Friend (Taxpayers’ Alliance) found the following: 

  • In 2016-2017, 2017-2018 and 2018-19, at least 6,980 settlement agreements were agreed between local authorities and former employees
  • Together these settlement agreements were worth a minimum of £98,059,105
  • In 2018 – 2019 the UK wide average settlement value was £99,044, with an average number of six settlements per local authority

Startling figures, and they are just the ones we know about. What about the individual schools / Academies that are fundamentally using settlement agreements as a means to solve ER issues, to exit that stubborn member of staff who no longer fits in with their vision? Let’s consider the figures and triple them, and that would be a conservative estimate. Every penny of those totals is money that could, and should have been invested in students. 

Yet more than this when did we fail to realise that every settlement negotiated is an opportunity lost to encourage systems and processes to be reviewed to ensure you never find yourself in a similar position. Arguably, every settlement negotiated is an opportunity for the receiving individual to consider it an accepted practice, so the behaviour is repeated as they move on to their next organisation, and many do just that. Ethically there is something systematically wrong with a member of our educational community receiving a 5 figure sum (tax free) then moving on to an agency who touts their CVs to various other schools. Organisations, Governors and Leaders need to put an end to this practice. They need to have faith and confidence in the very systems that underpin the delivery of their services, have faith in their HR policies and practices, and stand tall knowing their leadership practices are not only ethical but fair. Not only will this benefit the sector as a whole but will undoubtedly make a difference to the bottom line of the budget, and only then will this highlight how good HR becomes great HR.