Sharp Claws

One of the main reasons one rarely hears anything of the reasons behind executive dismissals is the practice of Compromise Agreements. A Compromise Agreement is a legally binding agreement following the termination of employment, which provides for a severance payment in return for which the employee warrants not to pursue any claim they may have via an employment tribunal.

In that sense it's a wholly reasonable settlement "out of court". But there's usually a really sharp clause in a compromise agreement - the one that requires the dismissed employee to claim to have left employment by "resigning", "retiring" or "by mutual agreement" and allows for most or all of the severance package to be refundable in the event that this clause is broken. So you get fired, tell everyone you retired, and take the wonga. No huge problem there, unless of course you are a senior employee of a local authority and your massive pay-off is funded by the Council Tax payer. When this happens, even a right-winger like me objects.

Penny and her good friend Jessica

So in the context of Julian's sacking of Hackney CEO Penny Thompson, I was surprised to read the following in this week's Hackney Groveller: Penny Thompson announced on Wednesday that she is to retire from the council in May after almost two-and-a-half years. Ms Thompson told the Groveller: "The mayor and I have agreed that after Hackney making tremendous progress over the past two years I will be moving on, subject to agreement." The key words here are the last three. This is code for "I will accept being fired and announce it as a resignation just as soon as the Council has agreed a sufficiently large pay-off".

Julian Pipeshaft

And I was equally surprised to read the following on LocalGov.co.uk: Speaking exclusively to LocalGov.co.uk, Thompson revealed she had been considering the move for some time and that she is currently considering her next move. She said: "I feel very proud of what I have achieved during my time at Hackney. It has been a privilege to lead such talented and committed staff and to work with such a high calibre Mayor and partners. I believe that I am leaving Hackney in a strong position from which it can move forward and I wish Hackney well." When Thompson joined the authority in January 2005 it was a basket-case that had been rocked by political, managerial and financial chaos. She has been credited as a key figure in turning the council around: it is now a two star authority with prospects for improvement.

Read this carefully and you can see that our former CEO has complied fully with the sharp clause in heaping praise on the "Mayor and partners", but the interviewer has not believed a word of it and has implied that she is claiming full credit for improvements during her tenure, referring to Hackney as a "basket-case" under the regime of former CEO Max Caller.

Max, on the other hand, "resigned for health reasons" (to take up a more demanding job with Haringey Council), having been "credited with saving Hackney Council from ruin after stepping in as chief executive in 2000 at a time when the local authority was £70m in debt". Previous to 2000, Hackney had been a hung council after the defection of several Labour Councillors over the Mark Trotter affair. So was Hackney a "basket case" in 2004 under our Labour Council and two years into Julian's mayorship, or is there a mistake in the dates here and did Hackney cease to be a "basket case" in 2000? Obviously it's not a "basket-case" now - only the most extreme left-wingers and frustrated swimmers would claim that! It appears to me that the old Compromise Agreement game is looking a bit shaky right now and the claws are well and truly out. That won't help at all, just before next week's local elections. I hope they succeed in keeping the lid on it all. Maybe we should have a whip round to boost the "Shhh! Fund".

"Mad" Max Caller