The claimant was employed as a Shop Manager by the respondent. She initially complained of sex discrimination and disability discrimination and failed to tick any of the boxes on the claim form relating to holiday pay or unpaid leave, despite having the benefit of professional advice at the time. On the day of the hearing, the parties resolved their dispute with the assistance of the LRA and an agreement was drawn up reflecting the claimant’s acceptance of a sum in full and final settlement of the proceedings.

Shortly after the agreement was concluded, the claimant’s husband discovered the claimant’s final payslip showing 86 days' unpaid leave which was not reflected in the agreement. The respondent argued that the claimant had compromised all claims she could have brought when she entered into the settlement agreement and thus it was not liable for payment of the unpaid leave.

The tribunal looked closely at the terms of the settlement agreement and held that they were clear as to what was covered by it and what was not. The tribunal rejected the argument that the claim for the unpaid leave was a ‘future claim’ i.e. a claim that the claimant could not reasonably have been aware of and rather referred to it as an ‘unrealised present claim’. The settlement agreement was thus construed to include holiday pay and the claimant’s subsequent attempt to be reimbursed for it failed.

Practical Lessons

Settlement agreements are legally binding agreements that can be used to end employment and set out the full terms of a settlement between the employer and employee. Usually, once the settlement agreement has been signed, the employee will be precluded from initiating any future claim relating to what is listed on the agreement.

The claimant in this case argued that she was completely oblivious to the possibility of any unpaid leave and the tribunal displayed some sympathy for her position, especially considering some mental health problems with which she suffered. Nonetheless, the fact that the claimant had a professional advisor was deemed relevant as the tribunal noted that he/she should have been able to probe the possible existence of an unpaid leave claim. A tribunal will rarely look beyond a watertight settlement agreement but when a claimant signs one with the benefit of professional advice it will be even less likely that a tribunal will entertain the possibility of future claims arising out of it.

NI Tribunal decisions are available on the OITFET website:
http://www.employmenttribunalsni.co.uk/