In the case of Bathgate v Technip UK Ltd and Others, the Employment Appeal Tribunal (EAT) held that a settlement agreement could not, in principle, compromise unknown future claims.
Mr Charles Melvin Bathgate v Technip UK Ltd and Others: [2022] EAT 155
Case summary
From December 2016 – January 2017, Technip UK Ltd (the Respondent) decided that redundancies needed to be made. Mr Bathgate (Appellant), who had worked for the Respondent for nearly 20 years, was informed that he was at risk of redundancy.
He was 61 years old and in a chief officer position at the time.
Following the Appellant’s acceptance of the terms of the offer, the Respondent sent the Appellant a settlement agreement which set out the terms upon which his employment would terminate. The terms included:
- Enhanced redundancy and notice payments, payable with the Appellant’s final salary; plus
- An additional amount that would be paid by the Respondent in June 2017.
The Claimant signed the settlement agreement on 29 January 2017, having had the benefit of independent legal advice from a solicitor.
However, in March 2017, the Respondent decided that the additional amount would not be paid to those made redundant, who were aged 61 and over. This was not communicated to the Appellant until June 2017, the month he was due to receive the additional payment.
The Appellant felt that the actions of the Respondent amounted to age discrimination, and he, therefore, brought a claim against them. Whilst the Respondent accepted that the Appellant’s age was the reason he didn’t receive the additional payment, the Respondent argued that the settlement agreement, which both parties had entered into, waived any right the Appellant had to pursue a claim.
As part of the Respondent’s defence, it also argued that the protections against discrimination, as provided for in the Equality Act 2010, did not apply to the Appellant in his role as a seafarer. This was because, even though at the end of his career, the Appellant had been working within the UK he had, for most of his working life with the Respondent, worked on a ship outside UK and EEA territorial waters.
Employment Appeal Tribunal’s ruling
The EAT held that a settlement agreement could not compromise unknown future discrimination claims.
In the EAT’s judgement, Lord Summers stated:
“In this case the claimant signed away his right to sue for age discrimination before he knew whether he had a claim or not. While that may be possible at common law, the [Equality] Act restricts parties’ ability to do so.
“The inclusion of a claim in a [settlement] agreement defined merely by reference to its legal character or its section number does not satisfy the language of [the Equality Act]. The words ‘the particular complaint’ suggest that Parliament anticipated the existence of an actual complaint or circumstances where the grounds for a complaint existed. I do not consider that the words ‘the particular complaint’ are apt to describe a potential future complaint.”
In respect of the Respondent’s defence relating to the Equality Act 2010, the EAT deemed that because the Appellant had worked onboard a ship outside of UK and EEA territorial waters for the majority of his working life, seafarer status had been maintained. The fact that the Appellant had worked within the UK for six months at the end of his career did not change this status.
As such, it was held that the Appellant’s claim for age discrimination was outside of the jurisdiction of the EAT, on the basis that seafarers working outside of the UK or EEA waters were excluded from making such claims under section 81 of the Equality Act. The Appellant’s appeal was therefore dismissed.
Comment
The Appellant did not know he had a claim for age discrimination until June 2017, which is six months after he signed the settlement agreement. If the Appellant had known, at the time of signing the settlement agreement and taking legal advice in respect of its terms, then he would not have been able to bring a claim.
It is therefore important that employers consider whether any of their actions, even after an employee has signed a settlement agreement, could amount to new acts of discrimination for which the employee may be able to bring a claim.
How Nelsons can help
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