The recent decision in Trago Mills (South Devon) Ltd v Information Commissioner and anor, from the First-tier Tribunal (Information Rights), has reinforced the confidential nature of the details of a compromise agreement. This case will be of interest to public authorities who are bound by the Freedom of Information legislation.

After a series of failed planning applications, Trago raised a complaint of prejudice and bias against a senior planning officer at Teignbridge District Council. An independent investigation found that Trago’s allegations were unsubstantiated. Shortly afterwards, the Council announced that the senior planning officer would be taking voluntary early retirement. Convinced that the real reason for termination was misconduct, Trago submitted a freedom of information request for details of the individual’s contract and termination package, under section 1 of the Freedom of Information Act 2000 (FOIA).

The Council provided Trago with a redacted copy of their former employee’s contract of employment and nothing more. The Council determined that the information relating to termination of employment was personal data of the senior planning official and disclosure would have been contrary to data protection principles. Trago appealed but the Information Commissioner upheld the Council’s decision.

The issue at hand for the Tribunal was the exemption contained in section 40 (2) of FOIA, where disclosure of information is not required if it would contravene one of the principles of the Data Protection Act 1998. The first data protection principle states that disclosure should not be made in cases where it would "prejudice the rights and freedoms…of the data subject". Therefore one issue here was whether disclosure would prejudice the rights and freedoms of the former senior planning officer.

The First-tier Tribunal (Information Rights) found that the termination package information was exempt from disclosure under section 40(2) of the FOIA because:

  • a closed bundle of documents made clear that that severance did not relate to conduct or performance issues;
  • even though this case involved a senior employee in a public-facing role, without any apparent wrongdoing a public interest argument could not be justified in this case; and
  • the individual’s expectation of privacy outweighed the need for transparency in the use of public funds.

Therefore, the Council was right not to disclose the details of a former employee’s compromise agreement in response to a freedom of information request.

Notably, the existence of a confidentiality clause in the compromise agreement was not determinative here. The Tribunal went further – stating that, even without an express confidentiality provision, an individual would have a reasonable expectation that the terms on which his employment came to an end would be treated as confidential. This case confirms that a compromise agreement commands a strong expectation of confidentiality from both parties, regardless of whether or not the agreement contains an express confidentiality provision.

On the other hand, it is worth noting that the Tribunal acknowledged there can be more compelling reasons for public interest disclosure of personal data, such as in the case of serious wrongdoing. For example, in the case of T W Gibson v Information Commissioner EA/2010/0095 the First-Tier Tribunal (Information Rights) did order disclosure of a compromise agreement for a local authority’s former chief executive. This was an example of the serious wrongdoing alluded to in the Trago case – as the individual in Gibson had been responsible for an overspend of £800,000.

Guidance is available from the Information Commissioner's Office on when information relating to employment contracts could be made available. Consideration will be given to factors such as the employee's expectations and any public interest in disclosure. The full guidance is available here.