A recent case before the Information Commissioner has important implications for NHS Trusts and those private companies exercising public functions who receive applications for disclosure of compromise agreements entered into with senior employees.

In the case of Trago Mills (South Devon) Limited v The Information Commissioner and Teignbridge District Council [2012], the First-tier Tribunal (Information Rights) upheld a decision of the Information Commissioner that a local authority was entitled to refuse part of a Freedom of Information Act 2000 (‘the FOIA’) request for information that related to the termination arrangements it entered into with a senior employee under a compromise agreement.

The First-tier Tribunal in Trago Mills held that disclosing details of the employee’s compromise agreement would be in breach of the first data protection principle, which requires personal data to be processed fairly and lawfully. The Council had therefore rightly withheld the requested information.  The Tribunal found that there was no public interest in the terms of the employee's compromise agreement despite the fact that he was a senior decision-maker in a public-facing role.  The employee's departure was not influenced by conduct or performance issues and as there was no suggestion of any wrongdoing in public office, it was difficult to see why there would be any public interest in the terms of his compromise agreement. The employee's reasonable expectation of privacy in the terms of his departure outweighed the local authority's duty to be answerable for, and transparent in, the expenditure of public funds.

This decision, together with an earlier case involving six NHS Trusts, strengthens the view that most employees, even those who operate in senior roles or who perform functions of a public nature can have strong and reasonable expectations of privacy in relation to the detail and existence of their compromise agreements.

A note of caution however, in spite of the Trago Mills decision, in some instances there will be a more compelling public interest in the disclosure of personal information, including details of termination packages. For example, where there is a belief that a departing employee of a public authority is being rewarded for failure, there may well be public interest considerations to weigh up; the seniority of the individual and the circumstances of departure will be relevant factors. For example, in the 2010 case of T W Gibson v Information Commissioner, the First-tier Tribunal did order a local authority to disclose the financial details of its former chief executive's compromise agreement. In this case she had left the local authority in the middle of a financial crisis and had been ultimately responsible for an overspend of £800,000. In those circumstances it was not considered reasonable for either party to expect that the detail of her compromise agreement could be hidden from the public on the basis of a confidentiality clause agreed between the parties.

Guidance has recently been published by the Information Commissioner’s Office and can be found on their website (www.ico.gov.uk). The guidance, titled Requests for personal data about public authority employees, relates to requests made under the FOIA for details of compromise agreements and explains how public authorities may apply the exemption contained in section 40 of the FOIA.