Flora confronts Jarvis after discovering he has been embezzling wages for years. Faced with exposing him, she must decide where her loyalties lie - above or below stairs. Elsewhere, Fred has to compete in a race to keep his job, while Grace and George agree to keep their blossoming relationship secret.

New Year's Eve offers a chance for celebration for the staff, but the merriment does not extend to William, as his nightmares over Lord Harry's death continue to torment him, leaving him vulnerable to under-butler Andrew Adams' goading and cruelty, which leads to a terrifying and violent showdown.

Young lovers George and Grace are almost discovered alone in the middle of the night, prompting Flora to demand a moral clampdown, against Mr Jarvis's better judgement. As the hunt to unmask the errant pair rages, the butler decides to move the household to Cumbria for a few months, leaving Flora heartbroken as she realises her true feelings for him.

A grand dinner is to be held and George gets William involved in a scam whereby they will obtain cheap fish for the occasion. Unfortunately the fish is bad and the guests go down with food poisoning. Andrew,the sneaky,bullying under-butler,is aware of what has happened and wants money to keep quiet. Grace comes to George's aid by selling her engagement ring to raise the cash

William trips on a loose rug and drops young Harry,who eventually dies. Accusations fly amongst the servants as to who is to blame but the Earl concedes that it was an accident. However a planned banquet is cancelled,allowing the staff to enjoy the chef's sumptuous fare. Grace takes the death to heart and picks flowers from the Earl's orangery to provide a blanket for the little boy. The Earl sees this as vandalism but blames and sacks Esther,a maid who had been tormenting Grace.

In 1850 the Earl of Taplow and his family return from Italy to Taplows,their country house,with their retinue of servants,led by butler Jarvis and house-keeper Flora. George Cosmo, a confident youngster,arrives seeking employment as the second foot-man,bringing with him forged references. Whilst Flora is willing to take him at face value,Jarvis is less certain. However the sudden departure of under-butler Frank creates a vacancy which needs filling immediately. George is taken on. First footman William is not impressed but he catches the eye of Grace, nursemaid to the earl's handicapped young son Harry.