Settling employment claims: Unknown future claims CAN be settled by way of a qualifying settlement agreement

Mr Bathgate, who was employed by Technip Singapore Ltd (Technip) for twenty years, accepted voluntary redundancy and entered into a settlement agreement in January 2017. The agreement stated that he would not bring any claims waived within it, including any claim for age discrimination under s.120 of the Equality Act 2010 (EqA).

As part of his voluntary redundancy package, Mr Bathgate was under the impression that he would receive both an "enhanced redundancy and notice payment" and an "additional payment". However, the additional payment was calculated in accordance with a collective agreement, which meant that he was not eligible as he was aged 61 at the time he entered into the settlement agreement. Shortly after learning this in June 2017, he brought an age discrimination claim in the Employment Tribunal (ET).

Mr Bathgate argued that under s.147 of the EqA, the "particular complaint" to which a valid settlement agreement must refer, could not include post-settlement claims. The ET disagreed and found that the waiver covered claims whether they were known at the time of entering into the settlement agreement or not. Although the age discrimination claim was a future claim, it had been identified in clear and unequivocal terms in the settlement agreement. The EAT however, held that the legislation did not allow any future claims to be waived under the settlement agreement.

The Court found that the EAT's interpretation of the legislation was incorrect, as it would render any settlement of all claims and potential claims impossible. They differentiated this case from an earlier case (University of East London v Hinton [2005] ICR 1260) because in Hinton, the settlement agreement attempted to settle "all claims in all jurisdictions", which was not specific enough to meet the requirements of a "qualifying compromise contract" under s147 EqA. However in this case, the settlement agreement specifically referred to age discrimination and the relevant legislation and therefore met the requirements under s147 EqA. The Court of Session upheld Technip's appeal on the grounds that the jurisdiction of the tribunal was excluded by the terms of the settlement agreement.