Transaction agreements “do what they say on the box” – they settle charges and claims without a winner or loser, as established by a court. “I see no basis or policy power to assess, in the initial phase, the relevance of the label that the parties have attached to their “confidential” transaction agreement. The principle of open justice is not in question. And no one has suggested, and I think it is controversial, that, in this first phase, the Court of Justice should be concerned, for another reason, with the question of whether the confidentiality that would have been granted to the agreement would be applicable in the event of a challenge. I believe that only then will the powers of duress of the court be invoked and the principle of open justice is invoked. In this case, the issue of the application of confidentiality clauses is highlighted in a transaction, particularly when compensation is paid in one go (which is usually the case) and confidentiality is compromised after payment. If this is the case, it may be difficult to quantify the financial loss (if any), which may deprive an innocent ex-employer of damages. To the extent that the confidentiality clause is limited to these elements, it is normally entirely acceptable, since these clauses are beneficial to both parties and do not have a major negative impact on persons outside both parties. However, problems arise when the employer attempts to extend the cycle too widely to the point where it wants to prevent the worker from expressing legitimate concerns in the public interest, making the confidentiality clause null and void. It would be invalidated and unenforceable as soon as it considered a disability and a violation of workers` right to a protected disclosure (i.e. whistleblowing) under the Public Disclosure Act (PIDA) of 1998 (as amended by the Enterprise Reform and Regulation Act 2013). Under this act, a worker can make a protected advertisement against his employer as long as he is satisfied that disclosure is in the public interest. Confidentiality clauses have become controversial in recent times, with some employers delaying them too far until they are too much of a gagging clause, as they have effectively concealed wrongdoing, criminal acts, negligence, incompetence, etc. In other words, the employer intended or was considered to have intended to prevent workers from disclosing such information if the disclosure was considered to be in the public interest.
The Mid Staffordshire NHS Foundation Trust scandal is an example. it was found that many patients had died as a result of poor care. It has been suggested that this issue could have been uncovered much earlier if potential whistleblowers had not been prevented from expressing themselves through confidentiality clauses. In response to this scandal, The Ministry of Health said: “The government has taken a number of steps to promote open dialogue, including amending the NHS Constitution, to anchor the fact that NHS organizations should support employees who express their concerns, ensure that these concerns are thoroughly investigated and ensure that there is someone who is independent outside their team to speak with them. This amendment also contains the legal right of staff to express concerns about safety, misconduct or other misconduct, without harming. We have always made it clear to the NHS that local policy should prohibit the inclusion of confidentiality clauses in employment contracts and compromise agreements to prevent the disclosure of information of public interest. Sir David Nicholson, head of the NHS commissioning committee, also wrote to NHS and NHS organisations reminding them of their responsibilities for compromise agreements.