When the Football Association (FA) decided to dispense with the services of manager, Steve McClaren, it was a costly exercise with McClaren receiving a reported payoff of £2.5m.
This serves as a stark reminder to organisations when appointing key personnel, to consider what would happen if the relationship goes wrong.

Solicitor John Arnold of Birch Cullimore says that when negotiating the terms of a contract, companies should consider the implications if the individual underperformed and had to be removed from the post.

John added: “McClaren’s pay-out is likely to include a payment in lieu of notice and to compensate him financially in respect of any other breaches of contract caused by the FA's early termination”.

“When negotiating appointments with key individuals, companies should bear in mind the implications if they decide to terminate the contract early. Amongst other things they should calculate is how much they would have to pay the executive on termination, what his or her pension rights are and the position in respect of share options.”
Guidance on employment contacts is available from Birch Cullimore who also operates an employer’s legal scheme. Anyone interested should telephone 01244 321066