The Court of Session has held in Bathgate v Technip Singapore PTE Ltd that section 147 of the Equality Act 2010 (EqA 2010) permits the settlement of a future claim unknown to the employee at the time the agreement was concluded.
Section 147 allows employment discrimination claims to be compromised by way of a settlement agreement that "relates to the particular complaint". Future claims will not be excluded so long as the types of claim are clearly identified and the objective meaning of the words used encompasses settlement of the relevant claim.
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 Technip Singapore PTE Ltd (Technip) 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 communicated to the claimant in June 2017 and he sought to bring a claim for direct and/or indirect age discrimination. Technip resisted this on the basis that the claim had been 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 Technip and listed various types of claim, including age discrimination. It also contained a waiver of "all claims…of whatever nature (whether past, present or future)..".
The Employment Appeal Tribunal (EAT) disagreed with this finding, 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.
The Court of Session disagreed. It held that the "particular complaint" requirement does not mean that the complaint must have been known of, or its grounds at least in existence, at the time of the agreement. Instead the question is whether the complaint being made is, or is not, covered by the terms of the contract. Although a rolled-up expression such as "all statutory rights" was insufficient to protect claimants from signing away rights, in this case the list of claims waived in the agreement specifically included those based on age discrimination. In relation to the extract from Hansard the Court concluded that it focused on protections for employees settling a particular issue during the parties' relationship, not on "clean break" agreements such as settlement agreements.
Take note: Although this is a Court of Session case (and therefore not technically binding in England and Wales) it has clearly overturned the EAT's decision which, in its turn, had conflicted with a couple of earlier EAT decisions on the issue. It's likely therefore that the Court of Session's judgment, which has resolved the conflict, will be followed in future. This is good news for employers who will now be able to approach the waiver of unknown future claims in a settlement agreement with more confidence. In order to waive such claims they must be clearly identified and it must be clear that the waiver is being given in relation to any of the identified claims that may arise in future.
