Compromise Agreements and Freedom of Information

An interesting case from last year highlights the potential tension between the public interest in transparency of public authorities' activities and the privacy of employee confidential information. Trago Mills (South Devon) Ltd v Information Commissioner EA/2012/0028 has shed some light as to the extent to which local authorities are expected to comply with Freedom of Information (FOI) requests. The decision, handed down from the First-tier Tribunal (Information Rights) (FTTIR), has reinforced the confidential nature of details contained within a compromise agreement between employer and employee. Although the case was decided under the English Freedom of Information Act 2000 (FOIA) it is likely that the same approach would be adopted for FOI requests under the Scottish Freedom of Information (Scotland) Act 2002.

Background

Prior to the dispute in question, Trago Mills (South Devon) Ltd (Trago) had a history of planning disputes with Tenbridge District Council (the Council). The disputes focused on planning applications in relation to shopping centres and other commercial premises. After a series of failed planning applications, Trago raised a complaint of prejudice and bias against a senior planning officer at the Council who had been responsible for a number of the decisions. However, an independent external investigation into the claims of malpractice found that there was insufficient evidence to substantiate Trago's allegations.

A short time following the investigation, the Council announced that the senior planning officer at the heart of the allegations would, along with five other members of staff, be taking voluntary early retirement. Trago believed that a cover up was taking place at the Council and maintained that the sudden departure was as a result of the senior planning officer's 'misconduct'. Trago consequently submitted a FOI request to the Council for details of the senior planning officer's contract and termination package
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The Council responded to the request by issuing Trago with a redacted copy of their former employee’s contract of employment but refused to disclose any further information about the senior planning officer on the basis that it was exempt information under section 40(2) of the FOIA. The justification provided was that the information constituted personal data. Trago pursued its complaint by filing a complaint with the Information Commissioner. This was unsuccessful and as a result Trago appealed to the FTTIR. As part of the proceedings, the Council submitted confidential evidence known as the 'closed bundle', relating to the circumstances of the senior planning officer's departure.

Decision

The issue at hand for the Tribunal centred on the exemption found within section 40 (2) of FOIA. The exemption states that disclosure of information is not required if it would contravene one of the principles of the Data Protection Act 1998. The first data protection principle states that disclosure should not be made in cases where it would 'prejudice the rights and freedoms…of the data subject'. It was necessary for the Tribunal to weigh up, the need for transparency in respect of a public authority's use of public funds against the senior planning officer's expectation of privacy.

The FTTIR upheld the Information Commissioner's decision and found that the information contained within the termination package qualified as exempt from disclosure under section 40(2) of the FOIA for the following reasons:

The Council was entitled therefore to refuse to supply Trago part of the information request which related to the terms of the senior planning officer's departure from the Council.

Comment

In this case the court decided that the employee's confidential information was protected under the section 40(2) exemption. However it also reminds us that the personal data exemption this is not an absolute one. Once deciding that the exemption applied, the authority has required to weigh up whether the public interest lay in disclosure or not. This case demonstrates that even the existence of a confidentiality clause found within a compromise agreement is not a determinative factor. Conversely, even without an express confidentiality provision, an authority would need to bear in mind that an individual would have a reasonable expectation that the terms on which his or her employment comes to an end would be treated as confidential.

In this case, the authority was correct in deciding that this right trumped the public interest in disclosure. In some instances, however, there will be a more compelling public interest in the disclosure of personal information, including details of termination packages. An example of this can be found within the case of T W Gibson v Information Commissioner EA/2010/0095. In this instance the FTTIR ordered a local authority to disclose the financial details of its former chief executive's compromise agreement, where she left in the midst of a financial crisis and had been ultimately responsible for an overspend of £800,000 in public funds.

This case is a good reminder that the sanctity of employee's personal information, and the usefulness of compromise agreements as a method for dealing discreetly with uncomfortable severances, is by no means guaranteed.