Lord Hall has revealed plans to cap redundancy and severance pay at the BBC at £150,000 for all senior managers.

The BBC will consult on proposals, which the DG wants to put in place by September 2013. The changes would affect the contracts of 250 senior executives at the corporation.

Hall said: “The BBC cannot be deaf to concerns about BBC staff pay-offs. These are difficult economic times for people across the country and the BBC is not immune from them. The financial settlements of the past cannot be justified in the future. We will consult on these proposals over the coming weeks but I believe they represent a fair way forward for staff and for licence fee payers.

“I appreciate that making changes to existing contracts is never easy. But it is to the great credit of the senior leadership team at the BBC that there is broad recognition of the need for change.”

He later told the Commons media select committee: “I very much hope we will get agreement [from staff and unions] and am confident we will. It’s a matter of principle for me, and I addressed senior managers about it this morning. We are responding to the public mood about it.”

The proposals would entitle senior managers to redundancy of one month’s pay for each year of service up to a maximum of 12 months’ salary or £150,000 - whichever is the lower.

That is in line with the Civil Service which has a similar cap.

As part of the new guidelines, all BBC Executive Board members would have their notice period reduced from 12 months to 6 months.

The BBC will consult on the new proposals with relevant staff and unions which are planned to come into force from September 1st 2013.

 

LORD HALL’S EMAIL TO STAFF

Dear All,

Since I arrived at the BBC at the beginning of the month, a key concern from people I have met has been the large amount of severance pay, including redundancy, the BBC has paid to former managers.  Today I am proposing capping these payments at £150,000.

Why are we doing this?

I believe that we have to address this because the settlements of the past can no longer be justified. It’s right, of course, that anyone who has given many years of service to the organisation should receive a percentage of their salary if they are made redundant. But, in the current economic climate, when our licence fee payers are facing tough economic circumstances themselves, when we are making programme cuts and we are asking our staff to do more with less, we have to limit the size of these payments.

Although this will be a difficult announcement for some people, I believe it is the right thing to do. And whilst there is a strong case for change, we must do this in the right way and fairly for those affected. 

 

How will we do this?

It’s worth remembering that this would only apply to people who are made redundant – it is not something that I hope will affect many of you.

For senior managers (SMs)

The majority of those potentially impacted are senior managers and we are therefore initially proposing changing the redundancy terms and conditions for senior managers (including the Executive Board and myself). There will now be a period of consultation with senior managers, and we hope to be able to implement any changes by 1st September. Full details are below if you want to know more.

For graded staff (grades 2-11)

There are also a small number of graded staff who would be affected by a proposed cap. We would not implement this change without first consulting with those individuals and the trade unions. We’ll do that over the next 2-3 months, as part of a wider consultation we will hold on redundancy terms and conditions that we first announced as part of DQF back in October 2011. Details of those original proposals are here if you want to look at them again. We’ll be in touch when we formally begin this consultation for graded staff.

 

For those already in discussions on redundancy

Where termination discussions are already underway for those senior staff members planning to leave between now and September, we won’t seek to impose these new conditions. We are working with each individual to agree the best way forward. In a small number of cases this may mean some staff leaving with settlements above £150,000.

The details of the changes for Senior Managers

·         The proposals would entitle senior managers with 12 years’ service or less to redundancy of one month’s pay for each year of service up to a maximum of 12 months’ salary or £150,000 - whichever is the lower.

·         Under DQF we said that people with more than 12 years’ service would retain their accrued service but couldn’t accrue a higher service entitlement. It’s still our intention to honour that commitment for senior managers but subject to the cap. So for example, a senior manager with 15 years’ service would be entitled to 15 months’ salary or £150,000 whichever is the lower.

·         All Executive Board members would have their notice period reduced from 12 months to 6 months. Where Senior Managers resign or are made redundant they would be expected to work their notice.

 

More information and questions

If you want more information there are FAQs here or if you don’t find what you’re looking for you can contact your local HR Director. If you are a senior manager you can also contact them in order to contribute to the consultation.

I believe that, whilst this is a significant change for some of our senior team, there is an understanding throughout the BBC that this is the right thing to do in order to better serve our audience, the licence fee payer. 

Best wishes,

Tony Hall

Director-General