You may recall that there has been much press coverage over the past 12 months or so about the use of compromise agreements/settlement agreements particularly in the public sector where employees are being exited and asked to sign confidentiality clauses in return for their settlement.  The use of “gagging clauses” is widespread but in the light of recent hospital scandals, concern has been expressed over whether the use of confidentiality clauses is appropriate particularly where the employee is offered a large settlement in return for their silence.

The National Audit Office has published its report following the follow up from its investigations into the appropriateness of confidentiality clauses in public office situations. You can read the report here.  Whilst the report found that the agreements it reviewed did not restrict the employee’s rights under the Public Interest Disclosure Act 1998 (PIDA) it felt that there was a need for better guidance on the subject and there should be some oversight to identify repeated patters of behaviour.

In the private sector, the use of confidentiality clauses In settlement agreements is wide spread.  However, the instances of PIDA are less applicable in my experience.  The nature of the public interest part of the disclosure is much more likely to occur in the public sector of course.  The danger however, is the public purse is larger and there is thus the inherent risk that the public sector employer may be able to offer higher settlements notwithstanding the auditing/approval safeguards many public sector organisations have in place.