More than £1 million paid to employees by Portsmouth City Council to prevent legal action over workplace disputes

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COUNCILS have paid out millions of pounds to employees in order to stop them taking legal action over workplace disputes.

The payouts come in the form of settlement agreements and are used to avoid potentially costly tribunals over problems staff have had during their employment.

But concerns have been raised about local authorities making such deals to resolve disputes and the amount of public money that’s been involved.

Figures obtained by The News under the Freedom of Information Act reveal Portsmouth City Council paid £1.017m to 58 employees in the past five years, with some getting as much as £107,000 each.

The city council made agreements with staff as well as those working for state schools.

Fareham Borough Council paid out to 14 workers, with the value of a package for each person ranging from £4,098 to £30,942, and three Gosport council employees were given £4,500, £2,500 and £1,000 respectively.

Three payments of £12,413, £14,00 and £10,500 were given out by Havant Borough Council, and one employee at Winchester City Council walked away with £40,849.

Southampton City Council made the most agreements, with 95 employees from 2009 to 2013 walking away with a total of £1.63m.

The payments are separate from any redundancy payment employees may be entitled to.

Authorities have refused to disclose the reasons why each settlement was made and who they were paid to in order to protect the identity of workers.

But experts say payouts are often made when staff have threatened to sue on grounds of unfair dismissal or where they feel their duties have been affected by issues like sexism or racism.

Sue Ball, employment lawyer for Verisona Law, said: ‘It’s always alarming, when councils are involved to the extent they use public money. Public money is accountable, so from the prospective of local authorities, you have always got to be mindful of your position in regards of that accountability.’

Settlement agreements are commonly used by companies to avoid legal bills and save money in the long run.

A one-day tribunal hearing can cost in the region of £10,000.

Sue said: ‘If you have a situation where an employee has the potential to sue you for discrimination or a number of other things, then the reality is you could be tied up in litigation costs and litigation terms for quite a number of months.’

There is no set rate for a settlement agreement and the value of each depends on the affected worker’s annual wage, as they may want a percentage of their income as part of a deal.

John Ferrett, Portsmouth’s Labour group leader and negotiations officer for The Prospect Union, helps to negotiate settlement agreements. He said companies having to make lots of agreements is a sign that morale is poor. ‘The figures are concerning,’ he said. ‘Council taxpayers’ money must be spent as efficiently as possible.’