Agenda item

Following Members’ request at the last Audit and Governance Committee, this Report provides an explanation of the concept and use of “non disclosure agreements” by CYC in the context of employment law.

Members considered a report providing an explanation of the concept and use of “non disclosure agreements” by CYC in the context of employment law, as previously requested by the Committee.

The Head of HR and HR Manager attended the meeting to present the report and answer Member questions. They stated that CYC used settlement agreements, and that Non-disclosure agreements were a clause within these. They were a mutual agreement between parties to terminate employment. They explained this report outlined current officer involvement in the process. There was no definitive answer as to the involvement of Members in the process across the ten authorities the Head of HR had looked at.

In response to Member questions they stated that:

·        Independent legal advice would be given to an individual on the Settlement Agreement and a portion of this cost would be met by the Local Authority; this was a set fee plus VAT;

·        Section 5 of the Constitution contained a summary of the access to information rules and need to know. The report was stating that, if Members were involved in the detail of NDAs it was important to demonstrate the ‘need to know’ in each case. This was not suggesting there was an issue with general oversight of the process;

·        Their understanding of ‘Member involvement’ in NDAs was a small number of Members, such as the Staffing Matters and Urgency Committee, not all 47 Councillors;

·        There was merit in Members having oversight of NDAs. This was already the case when looking at dismissal of Chief Officers. A format could be considered as to how this oversight would work, but the decision would still have to be made by the relevant Officer; and

·        Members could choose to recommend a change to the Constitution, but not every HR procedure or process was contained within it and so implementation of the Committees recommendations did not need to wait for a constitution review.

During discussion Members made some of the following points:

·        Settlement agreements should be considered somewhere, for example Staffing Matters and Urgency Committee, in order to discharge transparency and openness obligations and to give Members oversight;

·        There was a need to distinguish between oversight and involvement in order to maintain the roles of Officers and Members; and

·        Some Members expressed concern at the idea of Members being involved with individual decisions, rather than having oversight of the process. It was felt that not every Executive Member would be happy with being consulted and would want to get very ‘hands on’.

Resolved:   That the following recommendations be made:

·        A system of Member oversight of proposed settlement agreements and non-disclosure clauses be introduced to ensure that expenditure of Council Tax payers money is prudent and accountable;

·        There should be a presumption against Non-disclosure agreements unless a business case is presented that is viable and is then approved by Members (in a format to be decided); and

·        A formalised process be implemented so that there is consultation with Members on proposed settlement agreements and that the Constitution be amended to reflect this.

Reason:     To ensure Member oversight of settlement agreements and non-disclosure clauses.