FoI and Local Authority Gagging Clauses
In October 2009, a council employee, in dispute and soon to lose his job, opted to sign a compromise agreement. The document and its terms were placed before him, as a ‘full and final settlement’. All arrangements were funded by the employer; independent legal advice was given, and the solicitor’s signature secured. All legal requirements had been met and the employee’s signature on the dotted line would forfeit his right to an Employment Tribunal, along with the option to pursue any existing or future legal claims against his employer. All appeared to be in order and the employee’s pen hovered.
But an extra clause had been inserted, compelling him to forgo his right to submit any request under the Freedom of Information Act 2000 or the Data Protection Act 1998 – from that day forward – and not apparently restricted to this employer. This very particular “gagging clause”, perhaps in use for the first time, had been devised by the local authority’s legal team.
It was a very difficult decision to make even without this, and much rested upon it. In addition to the loss of his job and the personal upheaval, there was now an underlying legal poser to wrestle with, “Can I successfully contract out of my FOI / DP information request rights?”
But the deal was soon done, and a promising career was cut short, the pain eased slightly by the payment of a small ‘redundancy’ amount.
Such was the life-changing power in the hands of a consensus of council top brass, brought together for the closing chapter of a bitter and entrenched dispute, spanning almost 3 years. With a failed raft of trumped up disciplinary charges recently behind them, careful steps were now being taken to save face and reach agreement. Confidentiality shrouded everything. The employee, a family man with young children, knew he wouldn’t be welcomed back. Blowing the whistle had lost him his livelihood. He’d faced a stark choice: sign here, and accept what’s on offer, or sign there, fortnightly at the job centre. Concede, or take your chances at an employment tribunal in the New Year, where the outcome will be a lot less certain.
And come January, once the situation had calmed and the adrenalin levels had dropped, another question came to the forefront – “What would the legal consequences be of an approach to the council for information?”
This was where the Information Commissioner’s Office (ICO) first went onto the record:
“If your former employer refused to deal with your requests they would be likely to be in breach of the above legislation……. However if you exercise your information request rights there may be consequences such as legal action for breach of contract. Whether the clause you mention is a fair contract term would depend on the particular circumstances involved and the nature of the agreement you signed.”
The special gagging clause in use here had provided a unique twist, pressing the ICO into declaring an unusual, double-edged stance.
I decided to conduct some ‘WhatDoTheyKnow’ research into this, which began when snow covered the ground. I approached 345 English councils, requesting annual totals for compromise agreements and FOI / DP related gagging clauses – drawn up in circumstances of dispute, grievance or whistle-blowing. I discovered a rising trend with time, and to date, have unearthed 4,562 agreements, equating to an average of 14 per council over the last 6 years. As for the clauses, unlike the January 2011 snow, they were extremely thin on the ground. Where they do exist, they’re a ‘fail-safe’, used to supplement the one in general use – which follows a more established path: to deter signatories from discussing their workplace woes at career end and beyond. There is always a threat of “clawback” – whereby an employee breach would involve the employer suing for the return of the full amount received in settlement. In a victory for one-sidedness however, the penalty for a post agreement employer breach remains elusive, possibly mythical. The only parties generally permitted to know about the existence and wording of such agreements are the employee’s direct family, professional advisers, and the tax people.
There is at least one agreement however, where the gagging clause in use pushes the bounds of confidentiality to a startling extreme.
Back in November 2008, social worker, Martin Morton, blew the whistle on his council employer. After being let down by the Audit Commission and CSCI (later the Care Quality Commission), he turned to the press. His gagging clause was specific and cost the council £500. They also handed over £44,500, and sought to prevent him from discussing with ANY third party, an entire range of whistle-blowing concerns. The detail of these was shameful: financial abuse of disabled tenants – amounting to the unlawful deduction of £700,000+ from many of the council’s most vulnerable residents over several years; an ongoing refusal by senior managers to acknowledge that the practice was unlawful and should cease, and a campaign of bullying and abuse of power. The council’s behaviour towards its own tenants (four of whom have since died) has since been ruled as disability discrimination by the Equality and Human Rights Commission. An apology was also issued to Martin for proven management bullying and abuse of power. Worryingly, if he had ‘stayed bullied’, and not breached the gagging clause by going to the press, the public would never have known of the scandal; of the council’s failure to act; its lurch to secrecy; the public money squandered, and the protection and concealment that was gained by drafting a compromise agreement. The public interest would have been so neatly circumvented.
Upon signing such an agreement, from the employee’s perspective, an onerous double layer of security descends. They are told on the one hand, that they cannot take a specified action, and on the other, that they cannot reveal the existence of the agreement itself. The effect: a hidden pact, funded by public money, draws a veil over the placing of a dubious gag, and potentially, details of the most deplorable behaviour.
It’s neat, it’s effective, and it’s going on everywhere. But how many information governance or legal professionals in the public sector would regard such an approach reasonable, lawful, enforceable, or morally justified? Is the levelling of the FOI / DP gag ultra vires? Does the tactic sit well with publicly-funded bodies, amid their ongoing claims to openness and transparency? Or is it an impulsive lunge towards institutionalised reputation management, done to conceal at all costs, and to make damn sure the employer emerges unscathed, with whatever’s hidden never seeing the light of day? In the Morton case, was there a collective sigh of relief as the ink dried on the paper, and as foul conduct and a multitude of publicly-funded sins were swept under the carpet? A recent review undertaken by an independent consultant found the council involving itself in learning disabled abuse over a protracted period.
Central Government, the unions and most regulators regard compromise agreements and gagging clauses as justified, through the need to cut legal costs, avoid tribunals, and conserve public funds. The process is often dressed up as ‘supporting employees’. With free legal advice on tap, how can employees claim ignorance of the process and its consequences? They can walk away with a financial settlement for their troubles, and ‘grasp the opportunity for a fresh start’.
But this can be at extreme personal cost. Martin Morton had his life turned upside down, and was hospitalised due to the stress he had been placed under. Not surprisingly, he holds a different view, “Compromise agreements should only be used in business sensitive cases. They should never be used to suppress issues in the public interest. They are consistently used as a reputation management tool and are an abuse of power.” In Martin’s case, the gag had a thoroughly chilling effect. Such was the employer’s fear of exposure, the perfectly reasonable step of seeking legal advice would have breached Mr Morton’s agreement.
In June 2011, under threat of litigation led by Hugh Tomlinson QC, the council which had ‘opted out’ of its FOI / DP obligations backed down and withdrew the gagging clause, restoring the ex-employee’s rights. The monitoring officer responsible for the ‘ban’ has moved, perhaps where he belongs, into the private sector.
Martin’s ongoing battle with his council adversary and former employer has now moved to the ‘accountability’ stage. A long awaited 250 page report, drawn up by the independent consultant and costing £1,000 per page has now been placed in the public arena, albeit anonymised to protect those potentially culpable. However, the council, displaying a rather loose grasp on the true meaning of ‘accountability’, was not prepared to discipline two senior Social Services officers found to be at fault. Instead, despite acknowledging years of learning disabled abuse, the council pre-empted the report’s release by allowing the two to depart their posts quietly and by ‘mutual consent’, probably under compromise agreements, probably “paid off” and potentially in receipt of positive or neutral work references to furnish to any future employers.
These two officers received an equal share of £220,000 of public money. Many people believe this was paid to buy their silence, keep them ‘on side’ and prevent them from dropping very senior personnel into hot water.
Shockingly, on 25th March 2013, three judges found that the “Data Privacy” of the above two abusive senior officers trumped the welfare and wellbeing of disabled people, and dismissed the case. The officers also had their identities protected. Much of the evidence I submitted in the run up to the hearing has also been removed from this public summary.
1st October 2012
Link: Damning Internal Auditors’ report on Metropolitan Borough of Wirral’s approach to “Compromise Agreements”.
Within this post, there are some striking similarities to the content of the above article.
24th June 2013
Link to National Audit Office report on: “Confidentiality Clauses and Special Severance Payments”. Both of the above ‘Gagging Clause’ cases are covered here. See Case Studies 11 and 12.
The above report will be presented to the Parliamentary Public Accounts Committee on 3rd July 2013. Link to follow soon……….
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