Rutnam's constructive dismissal payout did not have NDA attached, Home Office says

Reported six-figure sum not a result of Treasury U-turn on payout caps, perm sec Rycroft tells MPs
Philip Rutnam quit last year amid bullying allegations against the home secretary Priti Patel (above). Photo: Leon Neal/Reuters/Alamy stock photo

Former Home Office permanent secretary Sir Philip Rutnam did not sign a non-disclosure agreement when the department awarded him a hefty settlement over his constructive dismissal claim, his successor has said.

The reported six-figure settlement was also not a result of the Treasury’s U-turn on regulations that would have capped civil service exit payments at £95,000, current perm sec Matthew Rycroft told MPs.

In a letter to the Public Accounts Committee last month, Rycroft said the settlement – which was reported to be around £340,000 – was a special payment under Managing Public Money guidance. He said the revocation of the Restriction on Public Sector Exit Payment Regulations 2020 , while not the cause of the payout, did change the approval process.

Rutnam’s payout has been the subject of much intrigue, with commentators speculating whether it had an NDA attached and why the government paid out such a hefty sum.

Responding to a series of questions PAC put to home secretary Priti Patel about the settlement last month, Rycroft confirmed there was no confidentiality clause attached to the settlement agreement.

“However, it does constitute personal data. It is common practice for the government not to comment in detail on individual personnel matters,” he added.

Committee chair Meg Hillier said MPs wanted to know why the government chose to award Rutnam a settlement rather than going to court over the constructive dismissal case, which the ex-official launched following his dramatic resignation last February. 

Rutnam said at the time he did not believe assurances that Patel was not behind briefings against him in the press, and that she had refused to modify her behaviour after reports she had bullied staff.

Hillier said PAC wanted answers, given that the maximum award by a tribunal is capped at “well below” the reported £340,000 figure.

As well as asking about the U-turn on the payout cap, Hillier said Patel should clarify whether a statement the Home Office made at the time saying it was in both parties’ “best interests” to settle “means that a settlement was viewed as more beneficial than the risks of going ahead with a trial”.

Responding on Patel’s behalf, Rycroft said it was “usual in employment tribunal cases to consider alternative methods of resolving claims”.

“Such considerations are taken in the normal course of events and are based on legal advice and consideration of value for money. Having engaged with Sir Philip and his representatives, it was jointly concluded that it was in both parties’ best interests to reach a settlement at this stage,” the letter, published at the end of last week, said.

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