MPs criticise ‘outrageous’ public sector gagging clauses

CIPD: MPs have condemned the existence of confidentiality clauses in the public sector where they are used to cover up whistleblowers’ concerns over patient care and child safety.

The Public Accounts Committee (PAC) has published its latest report examining the use of gagging clauses as part of compromise agreements for departing public sector employees.

The committee warned that confidentiality clauses were “not meant to prevent legitimate whistleblowing” but some workers had “clearly felt gagged”.

“It is clear that confidentiality clauses may have been used in compromise agreements to cover up failure, and this is simply outrageous,” explained PAC chair, Margaret Hodge.

“We heard evidence of shocking examples of using taxpayers’ money to ‘pay-off’ individuals who have flagged up concerns about patient or child safety.

“It is vital that people feel free to speak out to help prevent terrible tragedies or even deaths, and protecting the reputation of an organisation, such as the NHS, at the expense of public safety is unacceptable.”

The report cited a case of a consultant working for a primary care trust, who suggested that poor record keeping may have been a factor in the health and social care failings that contributed to the death of Baby P in 2007.

The consultant turned down an offer of £120,000 to leave and sign a compromise agreement, or face dismissal, and was only reinstated after four years’ absence on full pay.

“Signing the compromise agreement would have hampered the consultant’s ability to reveal shortcomings at the hospital, as it contained a requirement to return all documentation,” said the report.

Government data also showed that in the three years to March 2013 the Treasury approved 1,053 severance payments, totalling £28.4 million, which related to compromise agreements. However, the actual value was likely to be higher as the statistics did not include local government, the police or the BBC, the committee said.

The PAC called for greater transparency and monitoring of settlement agreements and special severance payments, and for the Cabinet Office to approve cases which specifically related to whistleblowing.

Following an earlier recommendation, the PAC said that the Cabinet Office was already preparing guidance for the civil service on the appropriate use of compromise agreements and confidentiality clauses.

Responding to the latest report, NHS Employers defended the use of settlement agreements and said that of the 50 cases in the health service that were reviewed by the National Audit Office, no evidence of gagging clauses was found.

“Compromise and settlement agreements can be used wisely and help save taxpayers money,” said Sue Covill, director of employment services at NHS Employers.

“We accept that the wording of these compromise agreements has sometimes confused people and this had to change. It is absolutely essential that staff feel confident to speak out, whatever the circumstances.”

Elaine Aarons, a partner in the employment team at Withers law firm, said that confidentiality clauses still had a place in compromise agreements.

“Gagging clauses never restrict or prevent the employers going to the regulators – that would be strictly illegal,” she said. “Gagging clauses are designed to enable the parties to move forward by ensuring confidentiality.”

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