Academic Freedom: for Institutions or Academics?
In the UK context, ‘Academic Freedom’ as a concept is dominated by the idea that institutions should be free from direct political interference.
The four classic categories are this freedom:
- Freedom to appoint staff
- Freedom to select students (so that Offa can instruct universities to expand their pool of applicants but not task them with changing the results of offers made).
- Freedom to teach (the curriculum is out of bounds to government)
- Freedom to research (invoke “Haldane”!)
This has two consequences:
- The loss of autonomy from partnering with private money – direct or indirect – is poorly sketched or understood and is abstractly – and naively – imagined as a free contract between two private parties (university and funding source);
- The academic freedom of academics is subordinated to the institutional definition. Do the four categories above cascade down to faculty or departmental level? Or are these freedoms the preserve of the executive?
Academic freedom as defended by vice-chancellors and managerial class really means the freedom to act like a business with light regulation, where academics are employees to be instructed and students are customers.
If we are serious about academic freedom for academics, then institutional governance needs overhauling. But it has to be done by academics. No HE legislation in 2015/16 is going to undo chronic managerialism with its bullying and incompetence.
Critical Education 
In the NZ context what you say would apply as well. However, I don’t think that here institutional autonomy necessarily trumps individual academic freedom. As I read it, institutional autonomy also prevents individual academics from inhibiting the academic freedom of others – particularly their colleagues within the same institution. http://academicfreedom.nz/2015/03/comparative-academic-institutional/
This isn’t to deny that ‘the institution’ might not also use autonomy to work against the legitimate expression of individual academic freedom in the ways you describe (e.g., by entering into contracts that inhibit the expression of academic freedom). In collusion with government, autonomy is operationally seen as having the power to do whatever is necessary to stay financial solvent. As solvency is made more desperate through reduced funding in real terms, expression of criticism by academics is seen as endangering the ‘brand’, therefore endangering funding, and thus autonomy.
The neoliberal shift in university governance away from academic governance in my view has seriously undermined the purpose and mission of universities. However, institutional autonomy has value worth preserving even when the institution functions properly.