It is not possible to compromise future unknown claims in a settlement agreement


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The Employment Appeal Tribunal (EAT) has held in Bathgate v Technip UK Ltd and ors that section 147 of the Equality Act 2010 (EqA 2010) which allows employment discrimination claims to be compromised by way of a settlement agreement that "relates to the particular complaint", does not allow for the settlement of a future claim unknown to the employee at the time the agreement was concluded.

The claimant was employed for about 20 years as a Chief Officer on a number of vessels. From August 2008 until June 2016 he worked on a ship, 'Deep Blue' which was registered in the Bahamas and operated outside UK and EEA waters. He then moved to an onshore role and accepted voluntary redundancy in January 2017. The voluntary redundancy agreement included settlement terms and provided for enhanced redundancy and notice payments, as well as an additional payment to be calculated by reference to a maritime collective agreement. In March 2017 it was concluded by TUK Ltd that, under the collective agreement no additional payment needed to be made to employees who, like the claimant, were aged 61 or over at the time of dismissal. This decision was eventually communicated to him in June 2017 and he sought to bring a claim for direct and/or indirect age discrimination. TUK Ltd resisted this on the basis that the claim was validly compromised by the voluntary redundancy agreement.

The tribunal found that the claimant's claim was precluded by the agreement which stated that it constituted full and final settlement of the claims that he "intimates and asserts" against TUK Ltd and listed various types of claim, including age discrimination claims. It also contained a waiver of "all claims…of whatever nature (whether past, present or future)..". The EAT disagreed noting that, for an agreement to be valid to settle a claim under section 147 EqA 2010 it must "relate to the particular complaint". The words "particular complaint" could not include a complaint that may or may not occur sometime in the future. It required an actual complaint to exist, or for circumstances where the grounds for the complaint existed.

The claimant had entered into an agreement that waived his right to pursue what the tribunal described as a "long list of claims", including age discrimination claims, and the EAT could not accept that this meant that the "particular complaint" had been identified. It referred to an extract from Hansard that showed that the provision in the Employment Rights Act 1996 which was equivalent to section 147 EqA 2010 was intended to be available only in the context of a particular complaint that has already arisen between the parties. The claimant had signed away his right to sue for age discrimination before he knew whether he had a claim or not. In the EAT's view, Parliament did not consider that a settlement of the sort seen in this case was desirable and had legislated to prevent it.

Take note: It's clear from this decision that any claims of which an individual is unaware at the time of entering into a settlement agreement cannot be covered by any waiver. The case is also a useful reminder to ensure that all the particular claims which the employer wishes to settle are referred to in the agreement.

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