Whistleblowing and ‘gagging clauses’

Last week, the legal protection given to whistleblowers came under the spotlight with the case of Gary Walker, a former Chief Executive of United Lincolnshire Hospitals Trust. He claims that he was forced out of his job because of his concerns about patient safety. That is denied of course, and it appears that after his dismissal (ostensibly at least for swearing at work) he settled for a sum reported as being £500,000.

I’m not sure if that is an accurate figure. As with most compromise agreements, there was a confidentiality clause which would have prevented either side from disclosing the amount agreed. I have direct experience of the press just making up a figure in these circumstances, safe in the knowledge that neither side can contradict it. However let’s assume for now that the the award was for £500K or something like it.

Last week Mr Walker broke his silence and spoke up about the bad practice that he says he observed. It seems that this put him in breach of the confidentiality clause in his compromise agreement (or gagging clause as everyone seems to insist on calling it) with the result that he received a rather stern letter from his former employer’s solicitors. The Daily Mail quotes him as saying:

It’s like Stalinist Russia – speak out and you’re crushed

Indeed. Stalin was well known for handing out six figure settlements to his harshest critics.

The Guardian reported the case of Delyth Jenkins who resigned following her treatment at work after she raised concerns about abuse at a day centre:

Jenkins said she “was totally unprepared for what would happen to me for simply telling the truth. I was entirely unprotected by the law.”

She resigned in 2010 and began a tribunal process. The council settled a day before the hearing, “which let them off the hook and left the truth untold”.

She added: “I am still distraught that the management structure which failed so miserably are still there, given a second chance. They have also been given anonymity in the ombudsman’s report, but if there is no accountability, nothing will change and this will happen again.”

That seems an odd way of looking at it to me. It takes two to settle a case. Who let them off the hook?

The same article reports the case of a nurse they call Pippa who was dismissed for shouting at a resident but who claimed that this was a response to her previous reporting of poor patient care and abuse:

Pippa appealed to the manager. An independent external consultant was bought in to hear Pippa’s appeal, and agreed with her regional Union organiser that she should get two months’ pay under a compromise agreement.

“It was a pathetic amount but it had never been about the money and by this point I was so traumatised, stressed and broke that I just wanted it all to be over.

“But along with the compromise agreement came a gagging clause, meaning I am not allowed to speak about this case. That makes me furious. Why shouldn’t the home stand up and be counted? If they’re allowed to stay unidentified, then perpetrators are allowed to continue working and flawed management structures remain in place – both of which have happened in my case.

Again, if it was ‘never about the money’ – why take the money and accept the confidentiality clause that goes with it?

Of course it is difficult, if you have been dismissed, to fight the case on to the bloody end just so you can avoid signing a compromise agreement that prevents you from repeating your allegations. But we should also remember that in these cases we are only hearing from one side. It is possible that the actual facts of each case are rather more nuanced than is being presented to us now. If, as an employer, you feel you are being wrongly maligned by a former employee, then surely you aren’t going to settle the case without an assurance that the employee will at least stop making (what you consider to be) unfounded allegations about you.

The main development last week was that the Health Secretary Jeremy Hunt was querying whether it was right to impose confidentiality clauses when whistleblowing cases are settled.

Those who follow #ukemplaw on Twitter (and you all should) would have seen mention from several Tweeters (@emmalgrossmith, and @mhrubenstein for example) of a provision which already seems to render any such agreements void. Take a look at  S.43J of the Employment Rights Act 1996:

(1)Any provision in an agreement to which this section applies is void in so far as it purports to preclude the worker from making a protected disclosure.

(2)This section applies to any agreement between a worker and his employer (whether a worker’s contract or not), including an agreement to refrain from instituting or continuing any proceedings under this Act or any proceedings for breach of contract.

That clearly says that a compromise agreement cannot prevent a worker from making protected disclosures. So how can the cases we have been discussing have included such clauses when the compromise agreement was reached?

The only wriggle room I can see is that the contractual clause referred to in this section must be between ‘a worker and his employer’. The compromise agreements in the press last week were made between former workers and their former employers.

Does that distinction matter? The Courts have been prepared to accept that a detriment inflicted on a former worker is covered by the Employment Rights Act and that this can extend to protected disclosures made after the employment has ended  (see the blogpost from Laurie Anstis here), but I haven’t found an authority directly on the scope of S.43J. The question must at least be open – unless someone out there can find a case I’ve missed.

Perhaps Gary Walker will prove to be the test case if Lincolnshire try to get their £500K back. In the meantime, it might not be a bad idea to clarify the provision. The Enterprise and Regulatory Reform Bill has its Report stage in the House of Lords next week and an amendment could easily be made to remove the ambiguity.  I noticed on Twitter this morning that @emmaharper had suggested just that to the BIS minister responsible, @joswinson.  Wouldn’t it be great if a Tweet led to a change in the law?

The change could come at a price though. If a compromise agreement does not stop a former employee from repeating allegations, then it will be a less attractive option for employers. They may be more inclined to fight the case and argue that dismissal had nothing to do with any disclosures the employee may have made. Six figure settlements will be even rarer than they are now but of course (as claimants always tell the press) ‘its not about the money’.



About Darren Newman

Employment law consultant, trainer, writer and anorak
This entry was posted in Whistleblowing and tagged , , , , , , . Bookmark the permalink.

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