Employee’s Severance Package: Freedom of Information versus Data Protection

In the recent case of Trago Mills (South Devon) Ltd v Information Commissioner it was held by the Information Rights Tribunal that a Local Authority was permitted to refuse part of a freedom of information request concerning a severance payment to a senior employee.   The Freedom of Information Act 2000 (FOIA) applies to public bodies.  As it allows everyone the right to request information held by public sector organisations, it can be a powerful tool for individuals to gain information about often sensitive issues.

Here, the details of the severance payment were held to be ‘personal data’ of the employee and to disclose details of the payment would have been contrary to the data protection principles. The payment fell within the definition of ‘exempt information’ under the FOIA.

The case involved a dispute arising as a result of a planning permission application by Trago Mills (South Devon) Ltd, which was rejected by the Council. Trago alleged that Teignbridge District Council’s former Service Lead for Planning had been biased in making the decision. The allegation was found to be unsubstantiated by an independent investigation. The employee at the centre of the dispute took early retirement, which was interpreted by Trago as a dismissal by the Council as a result of the alleged misconduct.

Consequently, Trago requested the details of the severance package under the FOIA.   The Information Commissioner, in dealing with the complaint made by Trago, concluded that although the employee held a senior office in the public sector, the argument for his right to privacy in this case outweighed the arguments for disclosure. Therefore, the information fell within an exemption of the FOIA and the Council had been correct to refuse the request.

On appeal, the Tribunal considered the effect of the exemption, which prevents disclosure of personal data. It was decided, the personal data should only be disclosed where there was a ‘legitimate interest’ for Trago and where doing so would not prejudice the rights and freedoms of the employee. While the Tribunal did not consider it decisive that the information was covered by a confidentiality agreement, they found that the employee had a reasonable expectation that the basis on which the employee’s employment ceased would remain confidential.

In this case, it was found by the Tribunal that the Council’s duty of transparency of public expenditure did not outweigh the individual’s reasonable expectation of privacy. The Tribunal went on to say that even if the employee had been guilty of the alleged bias there would only be a ‘legitimate public interest’ in disclosing the severance payment, if his behaviour had been sufficiently serious for the Council to take it into account in processing his application for retirement.

The decision was surprising given the strong onus on public authorities to disclose information relating to public expenditure. It will be interesting to see whether this case will set a precedent for withholding disclosure of payments to senior employees in certain circumstances.

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