Lothian Buses faces paying out half a million pounds in severance if three boardroom executives leave following a rift with chief executive Ian Craig, experts said today.
A senior council source told the Evening News that it was “inevitable” that one or more of the £200,000-a-year executives would depart following the dispute.
The source said the position of the three men – operations director Bill Campbell, engineering director Bill Devlin, and finance director Norman Strachan – had been undermined by chairwoman Ann Faulds’ dismissal of their complaint about Mr Craig and they were unlikely to remain in place. It is understood their complaint centred on Mr Craig’s alleged abrasive manner and his failure to consult them on key decisions.
The chief executive was cleared of any wrongdoing after a five-week investigation. Mediators have been called in and will sit down with all four men at a crunch meeting on Friday, but Lothian Buses customers and council taxpayers would end up footing the bill if peace talks fail.
The three men all pocket an annual salary of roughly £150,000 and received bonuses just under £50,000 in 2014. All three have worked for Lothian Buses for upwards of 14 years.
David Martyn, an employment expert at Thompson Solicitors, said that the minimum they could expect in any settlement agreement would be a year’s salary, with negotiations potentially yielding higher payouts for length of service and in lieu of bonuses.
Mr Martyn said: “Settlement agreements are exceedingly common, but we never hear about them. The reason we never hear about them is that they are all usually subject to strict confidentiality.
“We commonly deal with executives who depart usually when a new chief executive comes on board and they wish to restructure the team. Those are circumstances where the individuals concerned have done nothing wrong, and may be performing very well, but for some reason their face doesn’t fit.
“If the executive was properly advised, you would be expecting them to aim for at least a year’s salary.”
Politicians yesterday expressed concern at the breakdown in management at the top of Edinburgh’s public transport service.
Lothians Green MSP Alison Johnstone said: “The Lothian Buses service has a well-earned positive reputation and it would be a real shame if that was eroded by management troubles. It’s important that the situation is explained and resolved so we can have confidence in this publicly-owned business.”
And Tory councillor Jason Rust, who raised the issue at last week’s full council meeting, said: “I would be disappointed if there were departures from the board as a result of this dispute.”
Responding to the claims, Ms Faulds said: “This matter is being addressed and arrangements are in place to discuss a solution which is in the best interests of Lothian Buses.”