In the recent case of Bathgate v Technip Singapore PTE Ltd, the Court of Session has ruled that section 147 of the Equality Act 2010 permits settlement agreements to settle future claims unknown to the employee at the time the agreement was concluded.
Facts of the case
An employee of Technip Singapore PTE Ltd (Technip) worked for the company for around 20 years and then accepted voluntary redundancy. The redundancy agreement included a clause which settled all claims the employee might have had against Technip and, as is usual, listed various types of claims (including future claims) including age discrimination under the Equality Act. The agreement satisfied the statutory requirements of a settlement agreement, including the requirement to take independent legal advice on its terms and effect.
The agreement entitled the employee to an additional payment due under a maritime collective agreement. However, Technip later concluded that he was not entitled to this payment as the additional payment only applied to employees under the age of 61 and he was already 61 at the date of termination of employment. When this decision was communicated to the employee, he raised a claim of age discrimination in the Employment Tribunal. Technip defended the claim on the basis that age discrimination claims had been settled by the voluntary redundancy settlement agreement.
The Employment Tribunal agreed with Technip, but the Employment Appeal Tribunal overturned the decision, stating that a settlement agreement must relate to a specific complaint that has already occurred and that future claims could not be waived unless the circumstances giving rise to the claim had arisen before the agreement was signed.
Court of Session judgment
Technip appealed to the Court of Session on the settlement issue. The Court of Session has now sided with Technip, concluding that section 147 of the Equality Act does not prohibit the settlement of future claims unknown to the parties at the time of the agreement. As long as the types of claims are clearly identified in the settlement agreement, and the objective meaning of the words used encompassed settlement of the relevant claim, that claim cannot be raised later. The decision meant that the employee’s age discrimination claim could not proceed.
Key takeaways
The court emphasised that, for a settlement agreement to validly settle future claims under the Equality Act, the types of claims being settled must be clearly identified. The agreement in question listed various types of claims and had a general waiver for all claims, whether past, present or future. This level of detail was deemed sufficient to meet the statutory requirements. This case highlights the need for precision in drafting settlement agreements and careful consideration by employers and employees of the potential future claims which may arise.
For advice and assistance in carefully drafting settlement agreements, please do not hesitate to contact a member of our Employment team who will be happy to assist.
