Paid off or shoved off? A handy guide to social class

There has been a lot of fuss recently about high payoffs for BBC managers, though these were dwarfed by the massive sum awarded to Rebekah Brooks. The ‘rewards for failure’ charges came from both left and right.

I can’t comment about the performance of George Entwistle or any of the other BBC executives who received payoffs. Whether or not the BBC was over-generous will, hopefully, be clearer after the National Audit Office has completed its investigation.

What is certainly true, though, is that senior executives are far less likely to get sacked than most other employees – at least, not sacked in the sense that most people would understand the term.

As I have said before, the closer you are to the centre of power, the more the ‘People Like Us‘ factor and the ‘There But For The Grace Of God’ factor come into play. Your peers will want to treat you as they would like to be treated themselves, even if you have seriously messed up.

Therefore, when executives get to a certain level, certain things are beneath their dignity. They don’t have disciplinary hearings, they don’t get formal warnings from their bosses and it is very rare for them to be fired. Instead, they negotiate compromise agreements under which they are paid large amounts of money to resign. They waive their rights to make unfair dismissal claims in return for large payoffs and an agreement to go quietly. That way, everyone saves face and there is a minimum amount of fuss.

This happens even when executives have been in post less than two years and would have no right to a redundancy payment. It is not employment law that insists on such payments. They are usually written into contracts and the severance amounts are negotiated by highly paid lawyers on both sides. It is due to social convention, not legislation, that these payments are so generous. And BBC managers are governed by the same social conventions as any other organisation.

CIPD research last year found that the median compromise agreement was worth £10,000; more than double the median unfair dismissal award of £4,560. Even this is probably a conservative figure as those organisations agreeing to the higher payoffs are less likely to come clean about it in a survey.

This data supports my own anecdotal observations. Given that both compromise agreements and unfair dismissal awards are a function of salary levels, it is reasonable to assume that compromise agreements are more common among the higher paid, while the lower paid are left to fight out their cases at tribunals.

I have often said, and only partly in jest, that the best indicator of social class is what happens to you when you screw up at work. The more senior and well-connected people rarely need to fear the sack. The further down the social hierarchy you go, the more likely you are to be fired and the less likely you are to receive a significant payoff.

Forget whether or not someone says toilet or loo, or whether they scrunch up their napkin or fold it. What really tells you where someone is in the social structure is what happens when they mess up and get the push from work.

Here, then, is Rick’s handy guide to the British class system. (For the benefit of foreign readers, the British upper classes don’t work – or, at least, they are not employed in the way most of us would understand the term. The guide therefore starts with the Upper Middles.)

Class Likelihood of disciplinary action Method of dismissal and severance terms
Upper Middle Class (Private Sector) Very unlikely Seven figure payoff
Upper Middle Class (Public Sector) Very unlikely, unless a politician is looking for a scapegoat. High six-figure payoff. After a discreet interval, a non-exec role on an obscure public body.
Middle Middle Class (Private Sector) Unlikely, unless someone more senior needs a fall guy. Low six-figure payoff (more if long service or in financial services) plus extended period of ‘gardening leave’
Middle Middle Class (Public Sector) As above. High five-figure payoff (more if long service), plus extended period of suspension on full pay while your bosses plead with the finance director to sign off your compromise agreement.
Lower Middle Class Moderate – though lazy/cowardly managers more likely to go for compromise agreement or sham redundancy.  Working close to senior people is likely to get you a better deal. Low five-figure payoff, if your managers are lazy or cowardly and/or you have a good union. Otherwise, dismissal with pay in lieu of notice.
Skilled Working Class High. Disciplinary procedures were designed with people like you in mind. Dismissal with pay in lieu of notice. Union likely to oppose sham redundancy on principle. Militant union may get you a reinstatement deal.
Semi-skilled & Unskilled Working Class High. If non-union employer, procedure may be rattled through with unseemly haste. Dismissal. PILON negligible due to short notice period.
Precariat Low. What would be the point? You are on a fixed-term, agency or zero-hours contract anyway. Phone call to the agency saying “don’t send Jo Bloggs next week”.
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3 Responses to Paid off or shoved off? A handy guide to social class

  1. Kevin Ball says:

    I appreciate your humour but disagree with your view of causation.

    A Compromise Agreement implies that the employer feels they have a case to answer. Whether they are avoiding legal fees, a penal award from the Tribunal or bad publicity, reaching for the cheque book is a sign their advisors want this settled. This is just as likely the cause of the higher sums involved as anything else, including rank or class.

  2. Anya Palmer says:

    Love the handy guide, but I suspect at the top end how much you get really depends on how much you know about where the bodies are buried, and that’s where Rebekah Brooks hit the jackpot. That still leaves some correlation with class, because the higher up the social scale the more likely you are to know where the bodies are buried, but it’s a loose correlation, as the examples of Brooks and Coulson show.

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