Sunderland City Council paid £5million in 'compromise agreements' to departing staff, figures reveal

A Freedom of Information request has revealed six of the region’s councils shelled out a total of £8,404,882.89 since 2016.

The cash was paid out as part of settlement agreements, which are legally binding agreements during or following the termination of employment.

When these agreements, sometimes referred to as compromise agreements, are signed, staff usually get a severance payment and agree not to make a claim against their former employer at a tribunal.

Sunderland paid £5,129,000 in 306 settlement agreements signed since 2016.

In the financial year 2016/17, the council paid out £4,714,000 over the course of 291 agreements.

The following year the city council signed off on eight agreements worth £147,000.

In the financial year 2018/19, it signed off on seven agreements worth £268,000.

A spokesman for Sunderland City Council said that the agreements are normal employee relations practice.

He said: “Agreements are well-recognised as standard personnel and employment relations practice. They can reflect many matters between employers and employees.”

Northumberland County Council paid a total of £1,592,007.89 over 82 compromise agreements.

In 2016, the authority signed two agreements with former employees at a cost of £9,893.93.

A year later council bosses signed off on eight compromise agreements with payouts totalling £530,119.75.

In 2018, the council agreed four payments adding up to £60,536.11.

Last year, up until mid-December, it signed off on 68 agreements worth £991,458.10.

Meanwhile, Gateshead Council made 49 compromise agreements worth £684,150.69 over the past three years. In that time the largest individual payment was £40,000.

The authority says the majority of those agreements relate to people employed by the borough’s schools.

The employment contracts of most staff in schools can only be terminated, either by resignation or dismissal, other than in cases of gross misconduct, on one of three dates within the year – April 30, August 31 or December 31.

In these cases, the agreements are used to protect everyone involved should mutual termination of employment be agreed on a date other than one of the three contractual termination dates.

Newcastle City Council paid out £377,032.53 in the course of 29 compromise agreements made of the course of three financial years.

In the financial year 2016/17, eight agreements worth £64,200.02 were made with departing employees.

The following financial year 12 agreements worth £170,370.51 were made and in 2018/19 nine agreements worth £112,462.00 were signed off.

In North Tyneside, the borough paid out a total of £335,921.22 to staff leaving the authority over a three year period.

In 2016/17, this £79,257.26 was paid out, in 2017/18 £80,139.85, and in the last financial year £176,524.11 was paid.

South Tyneside Council signed 19 compromise agreements costing a total £286,662.39 over three years.

In the financial year 2016/17 four agreements were signed costing the authority £80,296.16.

The following year the council agreed to eight payments totalling £138,555.

In 2018/19 seven payments coming to £67,771.25 were made.