In the recent Scottish case of Bathgate v Technip Singapore PTE Ltd, the Court of Session has ruled that a settlement agreement can settle future discrimination claims unknown to the parties at the time the agreement is entered into. In its ruling, the Court of Session concluded that section 147 of the Equality Act 2020, which permits settlement of discrimination claims, includes such future claims that may not yet have arisen, provided that the type of discrimination claims are clearly identified.
This case concerned an employee, Mr Bathgate, who following 20 years in his employment, agreed to take voluntary redundancy. He therefore entered into a settlement agreement with his employer, Technip Singapore PTE Limited (“TSPTE”), the terms of which stated that the agreement was in full and final settlement of the claims that Mr Bathgate “intimates and asserts” against TSPTE. The agreement listed various types of claims including age discrimination claims under the Equality Act 2010. The agreement also included a general waiver of “all claims… of whatever nature (whether past, present or future)”.
However, several months after entering into the settlement agreement, Mr Bathgate became aware of a potential claim for age discrimination which had arisen after signing the settlement agreement. Mr Bathgate therefore lodged an Employment Tribunal claim against TSPTE for age discrimination. TSPTE defended the claim, arguing that the settlement agreement signed by Mr Bathgate had settled all age discrimination claims, including any future claims i.e. claims that has not yet arisen at the time Mr Bathgate entered into the agreement.
The Employment Tribunal agreed with TSPTE argument that all future age discrimination claims had been settled by the agreement and therefore rejected Mr Bathgate’s discrimination claim. Initially, on appeal, the Employment Appeal Tribunal overturned the Employment Tribunal’s ruling, making a finding that a settlement agreement could only settle claims that had arisen at the time of entering into the agreement. TSPTE appealed to the Court of Session (the Scottish court equivalent of the Court of Appeal).
The Court of Session found that Mr Bathgate’s age discrimination claim had be validly settled by the settlement agreement. The Court disagreed with the EAT’s finding that a settlement agreement cannot settle future claims. It reaching its decision, the Court of Session held that “a future claim of which an employee does not and could not have knowledge, may be covered by a waiver where it is plain and unequivocal that this was intended”. The Court also went on to conclude on the facts of this particular case that “it was clear that the agreement was intended to cover claims of which the parties were unaware and which had not accrued”.
Whilst this a Scottish court decision, it is nevertheless a helpful decision to employers looking for peace of mind that in compensating an employee/former employer in connection with potential claims that may arise in relation to their employment and termination of their employment, there is greater certainty that future claims (provided the claims are properly identified and the agreement is clear that the agreement includes settlement of future claims) can also be validly compromised.
Furthermore, it is likely that this decision will apply to discrimination claims settled by way of a COT3 agreement via ACAS.
Claims for discrimination can be a complex area of employment litigation. Ensuring settlement agreements are appropriately drafted, including meeting the requirements of Bathgate v
TSPTE, is of paramount importance. Here at Glaisyers, we have a team of solicitors specialising in such discrimination claims who can be contacted on 0161 832 4666 or email employment@glaisyers.com
