The acrimonious departure of a senior executive is rarely couched in terms of dismissal. A quick pay-off usually ensures that the executive keeps mum and the matter is swept under the carpet - or at least that's what companies have relied upon in the past.
All this could change if the Government's proposals to remove the £12,000 ceiling on compensation for unfair dismissal, as set out in its Fairness at Work white paper, go ahead. 'It's going to make the whole environment more contentious,' warns Paul Nicholls, employment law partner at Dibb Lupton Alsop. Taking an employer to court was always an option for aggrieved directors, but the prospect of limitless compensation will open the floodgates to opportunists seeking a higher pay-off.
Representative bodies are getting worried. They are concerned, particularly in this era of no-win, no-legal-fee action, that a sort of unscrupulous lottery might take place, with people at all levels tempted to pursue claims. This is why the Confederation of British Industry (CBI) and the Industrial Society have recommended that the Government cap compensation for unfair dismissal at £40,000.