Background:

The claimant worked for the respondent on a vessel registered in the Bahamas and one which largely operated outside the UK/EEA waters.  This occurred until June 2016 and from that point he then undertook onshore duties.   In January 2017 the claimant was offered and accepted redundancy terms and the settlement agreement was signed after receiving independent legal advice.

The settlement agreement outlined a waiver and stated it applied:

‘…irrespective of whether or not, at the date of this Agreement, the employee is or could be aware of such claims or have such claims in his express contemplation (including such claims of which the employee becomes aware after the date of this agreement in whole or in part as a result of new legislation or the development of common law).’

In March the respondent decided that those over 60 were entitled to an additional redundancy payment.  The claimant was 61 at the time and brought a claim.

Outcome:

The Tribunal, at first instance, held that the waiver covered the claims whether or not in the contemplation of the parties.   The claim being brought was identified in plain terms in the settlement agreement.   However, the EAT held that the waiver could not cover a future claim.  However, it was held that the claimant was a seafarer and as a result the Equality Act did not apply to him and therefore could not make a claim under Section 108.

The claimant appealed to the Court of Session on the issue relating to the legislation not applying (lack of jurisdiction) and the respondent cross-appealed on the point relating to the waiver.  The cross-appeal by the respondent was successful.   It was held that the protections for the employee within Section 147 of the Equality Act 2010 did not exclude the settlement of a future claim.  However, the types of claim had to be identified and objective meaning of the words had to be given.  Therefore, bearing in mind the content of the settlement agreement the Tribunal’s jurisdiction was excluded and the age discrimination claim could not be pursued.

The decision on the cross-appeal made the appeal by the claimant were academic.  However, the Court of Session dismissed that appeal citing that a ‘seafarer’ as outlined in the legislation related to the nature of the employment and did not change when the individual stepped on or off a vessel.  The EAT stated that it was someone who ‘habitually’ worked upon a ship and whilst the Court of Session was agreeing with the decision, it did not agree with the definition which they felt could cause more problems.

Practical Guidance for Employers:

Whilst this case demonstrates a narrow exception to the application of the legislation relating to those who work at sea – the more interesting aspect relates to the court’s approach when it comes to settlement agreements.  The fact that the specific claim was mentioned meant that it could relate to a future claim arising rather than a blanket approach stating that future claims could not be covered by a settlement agreement.

The full case can be viewed here:
https://www.bailii.org/scot/cases/ScotCS/2023/2023_CSIH_48.html