If staff have to go, it's better to pay them off to avoid bad publicity

Brian Ashton was reported to be consulting his lawyers after he was replaced last week as England's head coach. So was the Rugby Football Union.

What everybody wanted to know was whether Ashton's contract allowed the RFU to switch him to a job coaching the national academy. If not, he should now be entitled to a year's pay.

Employment lawyers contrast the coach's messy and drawn-out sacking with the blunt but effective approach of publicly quoted companies. Last week, for example, two senior executives at British Airways were made to carry the can for the disastrous launch of Terminal 5. Gareth Kirkwood, the airline's director of operations, and David Noyes, director of customer services, were out immediately.

How can that be, when 12 months' notice is normal practice at executive level in the absence of gross misconduct? The answer is that that executives are offered severance packages comparable to the awards they could expect to receive from a court or employment tribunal.

But this, in turn, can cause great resentment. Lower-paid staff face demotion or the sack if they fail to perform adequately. They cannot understand why senior executives should be treated any differently. Shareholders, too, do not like seeing failure rewarded.

In fact, says Rob Riley, an employment partner at Addleshaw Goddard, a speedy exit may well be in the shareholders' interest. If the executive can be persuaded to leave quietly, there may be little or no damage to the reputation of the company - or that of the executive.

Listed companies are required to tell the London Stock Exchange of any decision to dismiss a director as soon as possible, and generally within 24 hours - though the amount of compensation does not have to be disclosed. "A bad press and the aroma of failure associated with a 'sacking' do not help anyone," Riley explains. It is generally better for the brand if the executive can be said to have "retired" or left to pursue new challenges.

Nobody is likely to be taken in by such euphemisms. But adverse publicity can generally be restricted if the severance package is made conditional on the former executive's continuing silence.

As an employment lawyer, Riley aims for a resolution that leaves both sides happy. "A company and its shareholders may feel reluctant to remunerate a poorly-performing executive, but the prospect of a court case or tribunal claim and resulting press coverage may make a reasonable severance package the most attractive option for the company," he says.

"Managing reputation is really important in these situations. The director, too, will not want to be associated with the stigma of a public dismissal."