Thursday 5 May 2016 - Follow Up Report

Follow up of the Utilisation of Compromise Agreements

Topics: Severance

Departments: Treasury & Resources

Sector: Human Resources


Follow Up Report: pdf (576.99 KB)

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Termination of employment may result in claims by the employee against the employer. One of the means of mitigating this risk is entering into compromise agreements where a financial settlement is reached in return for the parties waiving any claims they might have against one another.

In 2012 the Comptroller and Auditor General (C&AG) issued a report on the Utilisation of Compromise Agreements and a separate report The Former Chief Executive – Compromise Agreement. The reports identified a number of weaknesses in arrangements and made recommendations for improvement.


This review evaluates:

  • the adequacy of the arrangements put in place to manage and monitor the implementation of the recommendations made by the C&AG
  • the extent to which the actions taken or identified against each recommendation meet the intended purpose of the recommendation; and
  • the progress made in implementing agreed recommendations.


The States have taken steps to implement some, but not all, of the recommendations.

Priority areas for further action are: 

  • embedding arrangements to respond to the impact of ministerial government when driving corporate change and, at the same time, delivering departmental priorities
  • reviewing contractual terms for senior staff when opportunities arise, taking into account the need for reform
  • developing the system of performance management, including for Corporate Management Board members, so that corporate priorities are clearly reflected and cultural change is clearly led from the top; and
  • developing and applying clear consistent documentation standards to support decisions to use compromise agreements.

Other Relevant C&AG Reports & Publications


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