After some delay, the York Council has explained why it has entered into 41 “Compromise Agreements” with axed staff during the last 5 years.
We reported in June that the York Council had spent £82 million on redundancy costs since 2011. 546 staff (not including teachers) had left the Councils employment with an average payment of £15,000.
The Council has also confirmed that 41 “Compromise Agreements” had been signed with staff. Usually these involve some sort of compensatory pay.
A compromise agreement is a legally binding agreement made either during or following the termination of employment. It is recognised by statute and is the only way an employee can validly “contract out” of their employment law rights. It usually provides for a severance payment, in return for which former employees agree not to pursue any claim or grievance to an Employment Tribunal.
A leading law firm says that the major reasons for using the compromise agreement (other than to settle an existing claim) are to “remove an employee on the grounds of poor performance or misconduct, to avoid legal challenge in redundancy situations and to make it easier to remove senior staff without embarrassment”.
The number of secrecy deals increased markedly when Labour took office in 2011
Three months ago, the Council were unwilling to specify why compromise agreements had been reached in so many cases.
Now, following an FOI appeal, they have lifted the veil a little.
Compromise agreements at City of York Council
Clearly the Council has come to several agreements to avoid the costs, and adverse publicity, often associated with claims that run through industrial tribunals.
The legal nature of the agreements means that they can’t be probed further.