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Councils in Tayside and Fife paid redundant workers thousands of pounds each to sign “gagging orders” to stay quiet about potential scandals.

Dundee alone shelled out £2.2 million over a five-year period, equal to about £8,800 for each of the 247 employees who left as part of job cutting schemes.

The agreements were slammed by Maureen Dickson, of the trades union Unison, in light of the £23m funding cuts currently being sought in the city.

She said: “It is a waste of money and there is no money going about. I don’t think spending any amount of money on settlement agreements just for the sake of it has any justification.

“We need to advise each member of staff individually. We wouldn’t advise that a settlement agreement is put in place as a matter of course.

“If it’s just to keep staff quiet it’s not something we would enter into. Clearly there are times when it is beneficial for both sides.”

An investigation by our sister paper, The Sunday Post, revealed town hall chiefs handed out at least £8.3 million as part of deals to keep workers quiet when they leave their jobs.

The so-called settlement agreements see workers handed an increased pay-off on the condition they don’t take their former employers to a tribunal or talk about them in a bad light.

Perth and Kinross Council paid out £158,626 to 51 employees, while Angus handed over £39,000 to just two workers. Fife refused to disclose the information.

In Scotland, there is a “presumption against the use” of settlement agreements in the NHS.

But no such guidance exists for local authorities, despite whistleblowers playing a vital role in exposing a number of public-interest scandals.

A spokesman for Cosla, the council umbrella group, said payouts worked both ways, by offering protection to workers as well as employers.

He said: “Authorities use settlement agreements in particular circumstances where, by mutual consent, the employee will leave the organisation.

“It is agreed without prejudice to the normal legal rights of the individual. It effectively concludes the working relationship by closing off any potential outstanding issues and ensures the departure from the organisation is without subsequent employment tribunal, grievance or any other claims which might, potentially, have cost implications for the council and by extension the public purse.

“It should also be noted that such agreements offer protection to both the employee and the employer and are not a one-sided arrangement.”

A Dundee Council spokesman said it used settlement agreements as part of its agreed policy for voluntary early retirement and voluntary redundancy.

He added: “As part of that policy, individuals receive independent legal advice prior to signing the agreement.”

A Scottish Government spokesman said individual councils were responsible for issues regarding employment.