Hackney Council spent £2million on gagging clauses for ex-staff over 5 years

Hackney Council has spent a whopping £2million to keep former employees quiet in the last five years, the Gazette can reveal.

A total of 82 non-disclosure agreement clauses (NDAs) have been used since 2014, Freedom of Information (FoI) figures show.

The payments are often used to keep details of disputes between employers and departing employees confidential.

The council stressed the £2,001,333.05 total also includes cash given out during lay-offs that include “settlement agreements” – payments made to departing employees to settle industrial disputes. One in five redundancies at the council includes a settlement agreement, a spokesperson said.

But critics say the figure is “deeply concerning” – not least because of the scandal surrounding widespread allegations of racism, bullying and harassment within sections of the town hall.

An independent investigation is currently taking place into the allegations, which were laid out in an explosive 18-page document sent to councillors by unions Unite, Unison and GMB in October.

For all our coverage on the issue, click here.

The unions secured a victory ahead of the probe when the council agreed that former employees who have left the council within the last two years could give evidence – though some may be unable to due to signing an NDA.

Ex-council worker Jabez Lam, 64, claims a colleague of his was set to give evidence supporting him in a disciplinary hearing in 2017 but couldn’t because, after complaining of racist discrimination, they signed an NDA and left the council.

Jabez therefore wrote to the council asking for the investigation to examine the use of NDAs in cases of bullying, harassment, and discrimination and also allow those who had signed the agreements to give evidence freely.

“It would make a mockery to allow former employee to give evidence only to be threatened with legal action from the council for breach of NDA,” he said.

In 2017, £607,922.51 was spent on 14 NDAs. Last year, that dropped to £214,263.44 spent on 13.

Green party campaigner Samir Jeraj, who made the FoI request, told the Gazette: “The nearly £2m spent by the council is deeply concerning.

“Not only is this money that should be spent on public services, but it raises real issues around how open and honest the council are being with residents, and whether they are trying to cover up serious staff issues.”

A council spokesperson said: “These payments are not simply for NDAs. A lot of these payments contain employee redundancy packages, which is a payment employees are entitled to receive from the council by law.

“Redundancy packages that end with settlement agreements include non-disclosure clauses, which are commonly used across all local authorities.

“The cost of end-of-term settlements needs to be seen in the wider context of council funding, employee entitlements under the law, and the need for staff structures to be more effective and meet future challenges.”