You are misunderstanding the word "confidential". When government sources, lawyers, judges, etc. say "confidential" (in context to HR and companies) they are referring to 2 key principals:
- Keeping your information from employees who are AT OR BELOW
your pay grade/job level. [Prevents spying on financial information, health information, and other private information]
- Keeping your information from certain outside parties (i.e.
strangers, other companies, etc.) [while still complying with legal
In your case, there is nothing preventing your manager from viewing your file (even if it just your termination letter) for any reason. He might need to do so if inquiries ever arose where:
- He/She got called by a prospective employer for a
reference/background check (he does not want to give false
information that could get him in trouble).
- He/She might need to check for data accuracy concerns (i.e. final work date discrepancies, disclosure of company info (passwords), etc.).
- If you were still active, he/she might need to know about
allergies, cultural/religious concerns (i.e. knowing when certain
holidays are for planning reasons), driving records if you do
company business while on the road, etc.
Managers, executives, and even shareholder(s)/owner(s) (country specific laws come into effect here) can view an entire employee's file if they so desire. Keep in mind these instances are documented (i.e. A manager, Bob, viewed an employee's file, Joe.) These individuals are allowed to access this information as it pertains to their role in the company and job duties.
Managers have the right to see why their employees quit for many reasons (lack of good pay, lack of good benefits, workload issues, personal/family issues, managerial issues, advancement/career points, etc.) all of which provide valuable insight into how a department and the company is doing. This data often gives managers the information they need to convince superiors to change things so retention rates increase for example. They also need to be aware of the termination reason(s), at the time of termination, to prevent them from coming up for dispute later on down the road if you ever reapply at the company, sue the company, the company gets audited, etc.
HR plays many key roles in a company, and while they must protect information from many people, they must also utilize the information within the business by giving managers the tools to properly do their jobs and keep departments running smoothly. If you are concerned your rights have been violated then I would recommend that you consult an attorney with HR, labor, HIPPA, and management compliance expertise.