Folkestone & Hythe Council Paid £230K to Departing Staff with No NDAs, Raising Transparency Questions

Folkestone & Hythe District Council has paid over £230,000 to a handful of departing employees since 2022 through confidential settlement agreements—legal tools designed to end employment relationships quietly, and often permanently.

While the council insists these agreements are standard, voluntary, and compliant with employment law, critics argue their use raises important questions about transparency, accountability, and the potential misuse of public funds.

What Are Settlement Agreements?

In the UK, a settlement agreement is a legally binding contract between an employer and an employee (or former employee) used to resolve disputes or bring employment to a close. These agreements—previously called compromise agreements—typically include a financial payment to the employee, along with clauses covering confidentiality, non-disparagement, and waiver of legal claims, such as those for unfair dismissal or discrimination.

According to guidance from Acas (Advisory, Conciliation and Arbitration Service), a valid settlement agreement must:

• Be in writing.

• Relate to a specific complaint or proceedings.

• Be signed after the employee has received independent legal advice—the cost of which is usually paid by the employer.

• Not restrict the employee’s right to make a protected disclosure (i.e., whistleblowing under the Public Interest Disclosure Act 1998).

Such agreements are common where an employer prefers to part ways quietly, avoiding the reputational damage or expense of a tribunal claim. They are voluntary—but often offered under tense or disputed circumstances. When negotiations are conducted fairly, they can bring a dignified end to troubled employment. But critics note the potential for misuse when transparency is lacking or when management seeks to silence internal dissent.

Settlement Agreements at Folkestone & Hythe District Council

Recent disclosures reveal that Folkestone & Hythe District Council has used settlement agreements sparingly, but significantly, over the past three financial years.

The £221,644 spent in 2024/25 represents a staggering 25-fold increase from the sum paid in 2022/23. The council notes that these costs include termination payments owed under contract—such as redundancy pay or payment in lieu of notice—as well as the legal fees for employees to obtain required advice.

All agreements reportedly contain post-termination confidentiality clauses and restrictions. The council asserts that no separate Non-Disclosure Agreements (NDAs) exist outside these arrangements and that employees remain free to whistleblow in the public interest.

What Are the Concerns?

Settlement agreements can serve a legitimate function—particularly when used to resolve genuine breakdowns in working relationships or avoid prolonged legal disputes. However, transparency advocates warn that when they involve public money, scrutiny is essential.

The dramatic rise in payouts in 2024/25 raises eyebrows. “If taxpayers are footing a six-figure bill to quietly exit a few staff, they deserve to know why,” said a current FHDC Councillor  who asked not to be named.

Concerns also exist over whether such agreements might be used to manage internal dissent, particularly if employees raise concerns about misconduct, poor governance, or policy failures. While protected disclosures are not legally waivable, employees may nonetheless feel chilled from speaking out once bound by a confidentiality clause.

Indeed, Acas guidance warns that confidentiality clauses should not be included “as a matter of course” and that improper conduct—such as intimidation or discrimination during negotiations—can render agreements legally vulnerable.

Council’s Justification and the Legal Context

Folkestone & Hythe District Council maintains that all settlement agreements have been entered into voluntarily and in full compliance with UK employment law. A council spokesperson emphasised that employees are required to obtain independent legal advice before signing, and that the agreements explicitly do not prevent individuals from making protected disclosures under section 43A of the Employment Rights Act 1996—commonly known as whistleblowing.

The council was also clear that it has not used any separate non-disclosure agreements (NDAs) beyond the standard confidentiality clauses typically included in settlement agreements. These clauses, it says, are intended only to protect personal information and to prevent individuals from being identified—particularly where small numbers are involved—thereby avoiding potential distress.

This position aligns with Acas guidance, which recognises that confidentiality provisions are a normal part of many settlement agreements, provided they are not used to gag whistleblowers or cover up wrongdoing. Employers are permitted to offer financial compensation in exchange for the waiver of legal claims, as long as the process is fair, voluntary, and legally advised.

Looking Ahead: Transparency or Obscurity?

While the council has complied with legal disclosure obligations, the heavy redaction of figures and absence of narrative explanation about the circumstances of each agreement leaves the public in the dark.

“In this climate of tight budgets, every pound spent behind closed doors should come with a compelling explanation,” said a sitting Councillor, calling for stricter scrutiny of senior HR decisions.

The public may never learn the full stories behind these agreements. But the sheer scale of recent payouts demands an answer to a basic question: what exactly is Folkestone & Hythe District Council paying to keep quiet?

The Shepway Vox Team

Journalism for the People NOT the Powerful