Non-disclosure agreements and the City of York Council

Secret papers considered last Thursday

One strange fact to emerge during Thursdays marathon meeting, which looked into allegations of misconduct against a local Councillor, was the fact that a key witness had signed a “Non Disclosure Agreement” (NDA).

The witness had been a former employee who had admitted a breach of the officers code of conduct. He faced dismissal but apparently “jumped ship” first. The terms of his leaving were not revealed but usually Non Disclosure Agreements are implemented when a payment of some kind has been made. They are intended to guarantee the silence of the individual concerned, unless any statements are made with the (former) employers agreement.

This proved to be slightly awkward on Thursday as the defence team had not been made aware of the NDA document before the day of the hearing.

Non Disclosure Agreements are common in parts of the private sector with companies trying to strengthen their intellectual property rights position. In return for their discretion, former employees enjoy a bigger payment than they were expecting.

We have commented before about the prevalence of compromise agreements, and the non disclosure deals that follow, at the York Council.

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”.

Freedom of information response on Non Disclosure Agreements

The Council did some years ago lift the veil on the number of such deals that they had agreed to.

During a period of 5 years it entered into 41 such agreements. In the main these were aimed at preventing employees pursuing cases through an industrial tribunal (which in fairness can be an expensive process for all side involved)

More up to date figures were provided by the Council in response to a Freedom of Information enquiry in November 2018 (right).

They revealed that there had been 68 NDAs made during a 6-year period.

Payments should be authorised by senior Councillors who meet on most Mondays to consider redundancy applications .

A typical agenda for such a meeting can be found by clicking here. The meetings are held in private

There is a suspicion that, in parts of the public sector, NDAs have become the norm with some senior managers reluctant to challenge bad behaviour.

Instead they take the easy way out….. at substantial cost to taxpayers

York Council explains reasons for secret staff payoff deals.

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 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.

Taxpayers may remain a little uneasy about the process and the robustness of the decisions that led to compromises being needed in the first place.

York Council scrambles to make £100,000+ staff exit sweeteners

Bid to beat government cap deadline

Behind clsoed doors 2016

The York Council will hold a private meeting in a few days time to consider what exit payments to make to senior staff leaving the Authority. The move follows a decision last month to reduce the size of its management team.

One Director will lose her job. It appears that one “Chief Officer” is seeking to retire early.

Council regulations require that any pay off deals, costing over £100,000, are authorised by Councillors.

No details of the individual payments have been published – to preserve individual privacy – but the payments are expected to be amongst the highest ever authorised by the York Council.

The Council report includes the following statement on national policy,

“The Government is currently consulting upon options to introduce a cap on the total cost of exit payments for staff working in the public sector. The total figure which has been proposed is £95k. The specific details of the scheme are still subject to consultation and have not been published but there is likely to be some form of ‘capping’ of exit payments introduced at some point in the coming months. On the 24th February, the Minister of State responsible for the introduction of these provisions confirmed that the earliest implementation date would be 1st October 2016″.

The Council has not yet fully responded to a FOI request for information on why it has imposed confidentiality (compromise) agreements in respect of 41 redundancy decisions made over the last 5 years.

While individuals do have a right to privacy, taxpayers also need to be convinced that their money is being spent wisely.

No justification is offered for the proposal to offer enhanced terms on “early retirement” to one officer and it appears that one of the posts will subsequently be filled by recruitment.

Sadly some will see this as another case of lack of transparency at the City of York Council made worse by an indecent haste to evade central government restrictions?

York Council has paid out £8.2 million in redundancy costs since 2011

546 staff made redundant – 41 sign “compromise agreements”

A Freedom of Information response has revealed the costs of cutting staffing levels at the York Council.

FOI response Redundancies table 2

The figures don’t include teaching staff.

In total 546 have left the Council with average pay-outs of around £15,000 each. Over 80% of the redundancies were voluntary.

The figures reveal that the largest number of redundancies occurred in 2011/12 when 212 left the Council. This has fallen gradually each year to a figure of 66 during the last financial year.

A total of £8.2 million has been paid out of which £4,554,000 was the cost of statutory payments, £3,339,000 early retirement costs and £352,000 pay in lieu of notice.

Only three former staff were subsequently re-employed directly by the Council.

The authority says, though, that they don’t record whether any of their agency or contract staff have previously been employed by the Council.

Individual redundancy proposals are reported to a small group of Councillors who meet each week in a “behind closed doors” decision session.

The Council has specifically said in its response that it “has made no enhanced redundancy or pension payments”.

Compromise agreements

The Council has also confirmed that 41 “compromise” agreements have been signed with staff. Usually these involve some sort of compensatory pay.

The Council has so far failed to explain what the reasons were for the compromise agreements that it has been party too.

While such agreements usually involve a confidentiality clause, there is no reason why the main reasons for the high level of use of the system in York cannot be made public.

We’ll press the Council to provide taxpayers with more information about this policy.

York Council publishes analysis of numbers made redundant

Over 100 York Council employees have suffered compulsory redundancy since April 2011.

In addition 420 have opted for voluntary redundancy.

The report – being considered by a Council committee tomorrow does not say how much the redundancies have cost taxpayers. However, after taking into account pension contributions, this is thought likely to be a 7 figure number.

Most of the redundancies occurred between May 2011 and April 2015 when Labour were in control of the local Council. Since May 2015 there have been a total of 43 redundancies, the majority of which have been voluntary.

Recent events suggest that the Council has shed too many experienced managers. As a result it struggles to cope with unusual events such as the recent floods.

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£284,000 savings in York education team as 3 face redundancy

The Council has revealed details of a new staff structure in its “learning” team. The restructure is aimed at saving £284,000 a year in staffing costs and has been influenced by the conclusion of some Europe funded projects.

Some voluntary redundancies have already taken place. Three existing staff face compulsory redundancy

The background report says,

“Many of these savings are coming from reduction in management posts, but there will also be some savings in direct service delivery, including reductions in some teaching staff, reductions in employability programmes and provision to support mental health issues.

These reductions are going to have a serious affect on the service’s ability to support individuals seeking work and those who require help with recovering from mental health issues”.

The decision was taken at a “behind closed doors” meeting held on 21st December.

Reports were not made public until after the decision had been published

Time to come clean on the costs of redundancy at the York Council

The York Council has shed a lot of staff over the last few years.

The redundancy terms – and payments made – to an individual are understandably considered to be private matters.

But the expectation was that the responsible Council committee would receive a public overview report detailing the total cost to the public purse.

A report to a meeting taking place on 22nd June is remarkably lacking in candour.

Councillors had been told on 8^th June that they could expect a “4 month overview” on redundancies. It seems that the information has not been made available or is to be considered in private.

That is a shame and an issue that Councillors should challenge the new Council Leader over.

There remains a suspicion that the York Council has lost too many experienced staff over recent years and this lack of understanding – and capacity – is at least partly responsible for the decline in public service standards in the City.