The University of Sheffield has spent over £1.8 million taking out controversial ‘gagging orders’ on former staff members in the last five years.
Compromise agreements with confidentiality clauses, known informally as ‘gagging orders’, have been issued to members of staff leaving employment for reasons other than early retirement. They are now known as settlement agreements following the Enterprise and Regulatory Reform Act 2013.
The agreements are used when the University is in dispute with a staff member and are made through a voluntary process where both the University and the employee are legally represented. But unions fear that employees may sign compromise agreements because they fear the stress associated with taking legal action or remaining in work.
The Trades Union Congress (TUC) said: “We are seriously concerned that the new legislative provisions on the admissibility of settlement offers and discussions in unfair dismissal cases will send a signal to employers that they are free to sack staff for arbitrary reasons without needing to follow a fair disciplinary procedure.
“Whilst employees will have a theoretical right to turn the employer’s offer down, many will consider they have no genuine choice other than to accept the sum of money and leave their job. Many employees will accept the offer simply because they assume it is a foregone conclusion they will be dismissed if they do not.
“Others will fear that they will be bullied or victimised if they remain in the job. The provisions are therefore open to abuse by employers and could have a detrimental effect on wider employment relations.”
The University said that “the decision to compromise is made taking into consideration factors including the beneficial impact to all parties through timely resolution to the dispute, the commercial impact of resolution, and the effective management of personal and or organisational risk.”
A former University employee who signed a compromise agreement told Forge Press: “Such is the stress of taking legal action against powerful organisations that many employees choose to sign a compromise agreement containing a gagging clause rather than pursue legal action and put their health in jeopardy.”
Cllr Shaffaq Mohammed, leader of the Liberal Democrat Group on Sheffield city council, described the figures as “worrying”, going on to say: “When such large sums are being spent on these agreements students have every right to know why this money isn’t being invested in university services instead. As one of the largest and most respected institutions in our city, the University of Sheffield should be setting an example to other employers.”
Compromise agreements have been a contentious issue in the area recently, sparking outrage from local people when it was discovered that Sheffield city council had spent almost £200,000 on the orders since 2011.
Sheffield city council spent £28,000 on compromise agreements in 2011 and £162,530 in the 2012-2013 period, with many of their compromise agreements including the controversial confidentiality clauses. But the University of Sheffield’s spend dwarfs this – with £196,907 spent on gagging orders in 2011 alone, more than seven times the amount spent by the council in that year, despite having only 6,031 employees compared to the council’s 18,000 plus.
The number of agreements made and the costs incurred are subject to annual scrutiny by the University’s senior remuneration committee, made up of the vice-chancellor and non-University staff.
The University has racked up almost £2 million worth of the controversial clauses in the past five years, peaking in 2009 when 24 agreements were made at a cost of £549,589.
In total, the University has made 102 compromise agreements with confidentiality clauses since 2008, resulting in a total spend of £1,835,498.
These figures also tower over the “concerning” spend of almost half a million pounds at the University of York. When the University of York Students’ Union officers found out about the £479,464 spend on confidentiality clauses since 2008, the spending was criticised as “careless”.
Kallum Taylor, York Students’ Union president, told York student paper Nouse: “These numbers are obviously concerning. Obviously we don’t know the ins and outs, but 80k a year could go a hell of a long way elsewhere for students here. Students are now paying a fortune, and their financial stake in the University has increased dramatically. Scrutiny on spending should be higher than ever, and this type of business shouldn’t be carelessly accepted as a norm.”
University of Sheffield Students’ Union president Ally Buckle declined to comment on the figures. A human resources spokesperson for the University said: “The University of Sheffield has a well deserved reputation as an excellent employer committed to developing a culture of excellence, collaboration, innovation, commitment and respect.
“The University is proactive in ensuring that it promotes and develops its staff capability, and considers a range of employment options to address any shortcomings which, when the circumstances warrant it, include compromise agreements. We take care to ensure this approach is only used voluntarily, and in circumstances where both parties have agreed it’s the best course of action, frequently in discussion with trade unions.
“The number of cases and University of Sheffield spending on such agreements is low when compared to other sectors. Over the past six years, spending has been at an average of around £18,000 per case, representing a tiny fraction of our total £1.1bn staff budget over the same six years.”