Follow up of the Utilisation of Compromise Agreements

Background

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.

Scope

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.

Conclusions

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.