Latest in Employment Law>Articles>Using Settlement Agreements to Prevent Future Claims: A Thing of the Past?
Using Settlement Agreements to Prevent Future Claims: A Thing of the Past?
Published on: 31/01/2023
Article Authors The main content of this article was provided by the following authors.
Kiera Lee
Kiera Lee

Background

The recent decision in Bathgate v Technip UK Ltd has limited the scope of Settlement Agreements in quashing future discrimination claims. The Claimant, Mr Bathgate, worked for the Respondent for 20 years before agreeing to take voluntary redundancy and entering into a Settlement Agreement, whereby he agreed to waive his right to bring past, current and future claims against the Respondent. An ‘additional payment’ was due to be provided per the terms of redundancy, but later the Respondent decided that said payment would not apply to employees who were aged 61 or over at the time of termination. This decision was not communicated to the Claimant. Upon discovery of this decision, Mr Bathgate brought a claim on the grounds of age discrimination.

Decision

After an appeal brought by Mr Bathgate and cross-appeal of the Respondent, the Scottish Employment Appeal Tribunal (EAT) held that Section 147 of the Equality Act 2010 does not permit a qualifying settlement agreement to settle future claims that were unknown to the parties at the time of execution of the agreement. It was decided that Mr Bathgate had unfairly signed away his right to bring an age discrimination claim in advance of such an issue arising. While common law permits this, Section 147 of the Equality Act 2010 restricts the abilities of parties to do so. The decision hinged on the wording of Section 147(3)(b), which states that a qualifying Settlement Agreement is a contract which relates to a ‘particular complaint’. The EAT found that a ‘particular complaint’ did not pertain to a claim that was unknown to the Claimant at the time of employment termination. The EAT  confirmed that the complaint or circumstances giving rise to the complaint must exist in order for it to be covered by nay waiver.

Impact

Although this case relates to the Equality Act which does not apply in Northern Ireland, the provision in question is analogous to those provisions in the various discrimination statutes in place in Northern Ireland. The principle remains the same across both jurisdictions. Unknown future claims have traditionally been included and waived using generic descriptions in GB and NI but Bathgate has now cast doubt over this catch-all method. This decision seems to depart from other cases such as Hilton UK Hotels Ltd v McNaughton EATS/0059/04, Hinton v University of East London [2005] IRLR 552, and recently, Arvunescu v Quick Release (Automotive) Ltd [2022] EAT 26 in which it was generally accepted that future claims could be waived. However, in these cases the complaints were in existence or in the parties’ contemplation at the time of settlement. It is an area that requires some clarification.

Conclusion

The decision is a reminder to employers and their legal representation to ensure that claims are specified where possible. However, without further case law, it is unlikely practitioners will move away completely from a catch all waiver as it would be difficult in practice to envisage and provide for all possible future claims. Whether failure to identify a potential claim would limit an employee’s success in bringing a claim is likely to depend on the facts of each case, but additional caution and precision in identifying claims is recommended.

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Disclaimer The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct at 31/01/2023