STAFF AT Stoke-on-Trent college are outraged at the decision to pay a Pounds 25,000 out-of-court settlement to the college’s former principal, Neil Preston, and its former assistant director, Helen Chandler.

College governors, who took the surprise decision just days before the couple were due to appear at a tribunal alleging unfair dismissal against the college, claimed that the costs of defending the action were too high.

Mr Preston and Mrs Chandler were sacked on Christmas Eve, 1996, after an investigation into a series of complaints from staff about their alleged unprofessional behaviour and incompetence. Prior to their sacking, the couple were discovered running a pub in North Wales while on paid sick leave from the college.

After their departure, both claimed unfair dismissal and breach of contract, while Mrs Chandler also decided to take a case to the Shrewsbury industrial tribunal claiming sex discrimination.

An auditors’ report by Coopers Lybrand found serious mismanagement in the college and an Pounds 8 million budget deficit. The shortfall led the new management to make 200 redundancies out of a staff of 1,200.

Angela Wilson, branch secretary of the lecturers’ union NATFHE and a lecturer at the college, said the settlement had caused widespread consternation among staff.

“It is utterly regrettable that they have paid out so much money to them, especially since staff who were made redundant - lecturers who had been with the college for more than 10 years - were left with less than Pounds 3, 000.”

But college officials said the settlements were substantially lower than the amounts Mr Preston and Mrs Chandler would have received in lieu of notice, had they not been sacked. Even if the college had won the cases, it would not have recovered its costs.

In a letter to staff informing them of the decision, Kevin Farrell, chairman of the college corporation, said: “We had wished to defend the claims but we have taken legal advice throughout the proceedings and having given consideration to all the factors involved, that advice is now tosettle. ”

He told The TES that the turning point came when the pair decided to take individual cases instead of opting for a single hearing, due to Mr Preston’s continuing ill-health.

He said: “The maximum payment on a claim of unfair dismissal is Pounds 11,000, and there is no limit in judgments about sexual discrimination.

“There was an additional risk that if Mr Preston had won and Mrs Chandler lost, we could have faced action for sex discrimination all over again. We estimated that to have a barrister, a junior and our solicitor to defend the claims could have amounted to Pounds 2,000 a day for hearings due to last 10 days. We were also aware that the public hearings would have generated lots of publicity at the very time we need to be concentrating on recruiting students. ”

But the decision has provoked strong criticism. Paul Mackney, NATFHE general secretary, who was the union’s Midlands regional secretary at the time of the sackings, said: “This case should not have been settled because of the serious public interest implications.

“People will inevitably think that there is a concern about other information emerging concerning the governance and mismanagement of the college which is being swept under the carpet.”

Both NATFHE and Unison will consult members when term begins to decide on their next course of action.