UPDATED – Concealing malpractice / enabling abuse with a Compromise Agreement / Gagging Clause

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FoI and Local Authority Gagging Clauses

Some years ago, 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 therefore been met.  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 the 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 4,410 agreements, equating to an average of 15 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, a social worker (let’s call him Mr X) 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 Mr X 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 Mr X 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.  Mr X 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 Mr X’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 X’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.

Mr X’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.

Paul Cardin


Twitter: @eVirtual_Assist

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.

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Anna Klonowski leaves her commission at Wirral Council – and Michael Frater’s departure

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I received an email this morning from Local Government Consultant and external investigator Anna Klonowski, in response to an email I sent last night regarding years of disability discrimination at Wirral Council – as discovered by Mike Smith of the Equality and Human Rights Commission:

From: Anna Klonowski
Sent: 27 July 2012 08:58
To: Paul C; Michael Frater
Cc: Graham Burgess; Green, Jeff E.; Phil Davies; Joyce Redfearn
Subject: Re: Disability Discrimination

Dear Mr Cardin,

I am no longer a member of the Wirral Improvement Board and have no commission with the Council. As a result I am unable to assist you further.

Kind regards


Anna Klonowski
Managing Director


Office Tel: 07824 531919

I’ve now decided to raise the issue of historical disability discrimination with Michael Frater, the LGA troubleshooter.  He is unlikely to be told about it by anybody, so I see it as my duty to make sure he gets all the information, acts on it now, prevents it recurring, and earns his money.

From: “Paul C” 

Date: Thu, 26 Jul 2012 23:36:27 +0100

To: Michael Frater

Cc: ‘Anna Klonowski’; Graham Burgess [email returned – address not known]; ‘Green, Jeff E. [Councillor]; Phil Davies [Councillor]

Subject: Disability Discrimination

Dear Mr Frater,

Back in 2010, I visited one of Angela Eagle MP’s surgeries and raised the subject of Wirral Council’s unlawful charging policy.  This was something that I regarded as systematic disability discrimination.

This discrimination had been committed both prior to and since Social Services’ senior staff ignored the detailed submissions of a whistleblower (Martin Morton), who had told them it was wrong and unlawful.  But the Adult Social Services Department continued to deduct payments from the bank accounts of 16 learning disabled residents of three supported living accommodations in Moreton, Wirral.  It is believed this unlawful charging occurred for a period of up to 9 years, perhaps longer.  As you will be aware, Mr Morton, in return for his public-spirited actions was forced out of his job, and I believe he is now unemployed.

Quite apart from the proven bullying and alleged mobbing of Mr Morton, I viewed the taking of this money from vulnerable people as disability discrimination, as did Mike Smith, the Chair of the Disability Committee of the Equality and Human Rights Commission.  In addressing Angela Eagle’s initial query, Mike Smith had written to her on 29th December 2010, confirming this and I attach his letter for you to read.

Within the letter, Mike Smith states that this was disability discrimination, because he disagrees with Bill Norman’s opinion on it.  He goes on “…Mr Cardin’s concerns should be included in the inquiry (Anna Klonowski inquiry), in order to identify whether there are other issues or systemic problems that need to be addressed.”

In other words, disability discrimination was “a given” – and the inquiry should now focus on looking for other issues or problems needing to be addressed.

However, whether through breakdown of communication, malpractice or incompetence, the law firm assuming the “disability discrimination role”, DLA Piper UK LLP (see pp. 240 to 249 of AKA report), did not address Mike Smith’s concerns at all.  They were either instructed, or took it upon themselves to adopt a much narrower remit, determining whether or not there HAD BEEN disability discrimination throughout a number of different time periods, eventually deciding overall that there hadn’t.  Which flew in the face of Mike Smith’s opinion and failed to address his stated requirements.

Prior to this letter, the now suspended Director of Law Bill Norman had reached his own conclusion, in Mike Smith’s opinion wrongly, that there hadn’t been disability discrimination.  I am concerned that a reasonable assumption by any third party would consider this arrangement to be suspect, given that Mike Smith’s concerns weren’t addressed, and that large amounts of public money in the form of solicitors’ fees were involved.

As I’m sure you will appreciate, unaddressed disability discrimination is an extremely urgent, serious and compelling subject, and I would be very grateful if you could acknowledge receipt of this email and then make enquiries of Anna Klonowski, Bill Norman, Surjit Tour and any other officers who may have been in a position to allow sloppiness or malpractice to creep in where it should not be permitted to,

Best regards,

Paul Cardin

UPDATE   27th August 2012

Although the above email, dated 26th July was sent into the ether over a month ago, I’ve had nothing back from Michael Frater.  I’ve decided to email Joyce Redfearn, the chair of the LGA Improvement Board instead, hopefully to shake things up and get them a bit more motivated.  This is after all an important issue.  We shouldn’t allow things to slide and permit DLA PIPER UK to get away with what many now regard as sloppy practice, possibly aimed at saving the Council (who commissioned AKA and presumably footed the bill for DLA Piper’s toil) a hefty compensation bill – yes – how shockingly cynical our world has become:

From: Paul C
Sent: 27 August 2012 22:20
To: ‘Joyce Redfearn’
Cc: ‘Michael Frater’; Paul Burstow; ‘Angela Eagle’
Subject: FW: Disability Discrimination

Dear Ms Redfearn,

There’s an important issue covered in the emails below; that of Wirral Council’s historical disability discrimination, carried out deliberately over several years – raised with the Equality and Human Rights Commission some time ago, and with Mr Frater last month.

However, despite being “remunerated” a reported £1,200 per day, he has failed to acknowledge the original email, nor the reminder sent recently.  I’d appreciate it if you could acknowledge receipt of this one with me, and then discuss and action the matters raised with Mr Frater, possibly during the Improvement Board sessions which you are privileged to chair.  You may wish to remind him that the issue has now been taken up again with my local MP Angela Eagle, in part due to his ongoing failure.

I was told today that Paul Burstow MP, the minister concerned, is writing to me this week to update me on the related issue of an ongoing threat of abuse to vulnerable people – on Wirral and further afield, created and enabled by Wirral Council’s quite calculated failure to safeguard their wellbeing,

Best regards and thank you in advance,

Paul Cardin

UPDATE   2nd September 2012

I’ve received the following reply from Joyce Redfearn, chair of the LGA Improvement Board at Wirral Council:

Dear Mr Cardin

I am acknowledging receipt of your email as you requested.

The issue you raise is one to which Wirral Council should respond .  Mr Frater has now left the Council so I am forwarding your email to the acting Chief Executive Mr David Armstrong who will ensure that your email receives appropriate attention.

Best wishes

Joyce Redfearn

By my estimate, Michael Frater earned approximately £75,000 for his stint of 3 day weeks  at Wirral.  If you divide £75,000 by £1,200, you arrive at the number of days worked, which is…. 62 and a half.

It’s a relief that he wasn’t taken on for a whole year, because this would have translated to an annual salary of  approximately £313,200.

It’s also a pity he couldn’t respond to my July email (see above) and say, “This is nothing to do with me…. this is for the Council to address” – maybe because this would have flown directly into the face of just about everything those big names in central government e.g. Grant Shapps, Paul Burstow have been shouting… that the LGA has been sent in to sort the place out !

And alas, the Wirral public won’t get any answers from the troubleshooter.  Mr Frater has now packed up and gone…