Settlement agreements, Whistleblowing and the NHS (and every other employer too)

Settlement agreements, Whistleblowing and the NHS (and every other employer too)

This morning, I had the good fortune to hear an interview on the radio with the National Guardian for the NHS, Henrietta Hughes. She was there to talk about her role, which involves ensuring that NHS staff feel free to expose wrongdoing, and she is concerned that gagging orders within Settlement Agreements are destroying the confidence people have to blow the whistle if necessary.

The interview, on Radio 4’s This Morning programme, outlined concerns that gagging clauses in Settlement Agreements made it hard for people to come forward, and that employees who signed such agreements are often unclear as to what they mean. Illustrations were given whereby employees thought that they were unable to talk even to their own GP or counsellor.  Arguably worse still, if an employee knows of mal-practice or some occurrence which is endangering the public, they may feel unable to flag it up once they have signed such an agreement.

I have to say that this is accurate, although not the whole picture.

For those who are ignorant of the daily workings of employment law, the question arises often in the following way. An employee may see or know of something that is bad practice, maybe even life threatening. The employee then raises this with a superior, or threatens to expose the risk, and the superior who is responsible, instead of correcting the fault, views the employee as a trouble maker and takes some form of action against them. Hence people might lose their jobs, be disciplined and have their reputation ruined, or suffer some other form of discrediting or bullying.

These actions can lead to the departure of the employee, (often after a long period of great pressure) and an agreement being offered (Settlement Agreement) which gives them what is called compensation, and a long contract giving up their rights to sue their employer.  In order to be valid, the employee must take the agreement to an independent advisor, often a solicitor, who should explain what the agreement means. The agreement is not valid unless this has occurred, and without exception, the employer offers to pay for the legal advice because without it, the agreement won’t be binding.

This is not confined to the NHS, but it is in that venue that the issues or risks discovered can most often be life threatening.

As a solicitor, I feel I must express my personal opinion, but if the criticism of Settlement Agreements is accurate, and in part it certainly is, then it is my own profession that is largely responsible, and the resolution must lie with the solicitors.

People think they can’t speak to anyone after a settlement agreement.

The first criticism is that people are not clear on who they can talk to after entering into a deal. The narrative here states that people are concerned that if they say anything to anyone, they will lose the payments, or even have to pay the employer’s legal fees if they blow the whistle.

Given that the agreement is not valid without having received an independent advisors advice, isn’t it incumbent upon the advisor to point out that it is unlawful to gag someone who wants to blow the whistle on a public interest issue? (I shouldn’t need a question mark here, it’s a rhetorical question). Of course it is the responsibility of the adviser to make this clear.

Advisors all too often don’t actually try to negotiate these agreements, and simply sign them off.

This could be resolved by additional wording in the advisor’s declaration about whistle blowing, making the advisor declare that they have explained to the employee that even after the agreement is signed, they can still make disclosures in the public interest, and they can still make disclosures to GP’s, counsellors and others who are governed by a duty of confidentiality.

Advisors don’t have the time to advise and negotiate properly, removing inappropriate clauses.

This could be resolved only by more careful use of drafting, less showing off when producing agreements.  This is partly the fault of the lawyers who draft the agreements in the first place. For a reason that is still opaque to me after 25 years, some lawyers seem to see producing settlement agreements as a chance to parade their mental prowess in front of the world by adding in every conceivable restriction whether relevant or not.

For example, I regularly see a clause in settlement agreements that makes the employee warrant that he has not committed an act of gross misconduct (for example).  Given that often, these agreements come into existence when an employee is accused of doing exactly that, I have to ask what the point of it is? (Another rhetorical question).  An employee in such a position should never agree to such a clause when it makes the payment dependent on the warranty being correct. Yet I regularly see the clause appear, which is thoughtless drafting in my opinion, and I regularly see employees accept the clause when they shouldn’t.

In the NHS itself, this could also be alleviated by agreeing with the unions a standard form document. It’s not rocket science.

Employees feel under pressure to accept the deal

This occurs when the employee takes the agreement to an advisor, who then charges for explaining the deal. The employee has then made a commitment to the advisor’s fees before understanding the contract, and often then, before realising that they don’t want to sign it. The problem is, if they don’t then accept the deal, they don’t get the legal fees paid, and so have to find that money themselves. This then puts pressure on the employee to agree to the deal, even if, once they understand it, they don’t want to.

This could be resolved by making the legal fee contribution payable by employer regardless of whether the agreement is entered into or not.  In fact, such a rule would also increase the chances that the contract would be drafted more appropriately in the first place.

In short, lawyers themselves need better training, and perhaps a certification process is more appropriate to show lawyers are skilled in this particular discipline, than the current de-regulation allowing such agreements to be advised upon by an ever-widening circle of advisors.

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