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disciplinary hearings employment law settlement agreements suspension

cases proving costly to the public purse

On 22 July news emerged via BBC Newsnight that Haringey Council accounts show that a payment of £679,452 was made to Sharon Shoesmith.

The breakdown reveals salary and related payments amounting to £377,266, £217,266 compensation for loss of office and £84,819 for employer contributions. The Council had already disclosed that it has paid legal costs amounting to £196,000.

Ms Shoesmith has said that she “does not recognise” the figure quoted. The likely reason for this response is that the terms for settlement were set out in a settlement agreement with a confidentiality clause. Haringey has almost certainly breached the clause by disclosing the amounts but they were in a catch 22 because they are at the same time obliged to itemise such expenditure in the accounts. They will probably say that they were legally bound to make the disclosure notwithstanding that the disclosure defeats the purpose of the clause.

In the meantime Caerphilly Council will have paid suspended chief executive Anthony O’Sullivan over £330,000 by the time of his trial for misconduct in public office in January 2015. His suspension commenced in early 2013 when a police investigation was launched. There is a well known problem in progressing disciplinary proceedings while criminal investigations and proceedings are ongoing since employment sanctions cannot be imposed without proper investigations and disciplinary proceedings and it is generally thought inappropriate for criminal and employment proceedings to run in parallel. Of course, to suspend without pay would be likely to indicate a presumption of guilt so the Council really has no option other than to make the payments.

Audit costs add a further £900,000 and £1.5m extra will have been paid to employees as a result of the disputed pay deal.

The information came to light as the result of a freedom of information request by Plaid Cymru.

The criminal trial concerns allegations of unlawful pay rises and also involves deputy chief executive Nigel Barnett (who will have received £263,453) and head of legal services Daniel Perkins (£95,601).

However even these figures are dwarfed by the estimated £1.6bn in redundancy payments paid to NHS managers since 2010. According to a report in The Guardian the payments included settlements paid to “revolving door” managers who took the payouts but returned on full or part time contracts. In all there have been 38,419 packages, of which 83 were for between £150,000 and £200,000 and 40 were for over £200,000. As The Guardian reports the disclosure coincides with concern expressed by the Audit Commission about the number of NHS Trusts that are in financial difficulties.

Martin Malone

By Martin Malone

I'm a solicitor and the chief operating officer at Canter Levin & Berg. I was formerly head of the employment department.
I maintain this website so if you have any suggestions, criticisms or recommendations please email me at martinmalone@canter-law.co.uk.
Outside work my interests include national hunt horse racing, France and French wine and current affairs. I also design and maintain websites.