Settlement agreements and settling future unknown claims

Trainee Solicitor, Jasmine Harland discusses the recent case of Bathgate v Technip Singapore PTE Ltd.

Claims for discrimination can be settled using a settlement agreement as long as the settlement agreement relates to the ‘particular complaint’ that could be advanced. In the recent case of Bathgate v Technip Singapore PTE Ltd, the Court of Session (Scotland’s highest court) held that a settlement agreement can be used to validly settle future unknown claims under the Equality Act 2010.

The claimant was made redundant but later presented a claim against his former employer for post-employment age discrimination. Section 108 Equality Act 2010 permits the bringing of discrimination claims after termination of employment, specifically if the discrimination arises out of and is closely connected to a relationship which used to exist between them and the conduct would constitute the discrimination if it had occurred during the relationship and contravene the Equality Act 2010.

Terms of the settlement agreement were agreed between the claimant and employer, however, after the settlement agreement had been signed, the employer decided it no longer needed to make an additional payment to the claimant under a collective agreement due to the fact he was over the age of 60 – this formed the claimant’s claim for age discrimination.

The employment tribunal concluded that the age discrimination had been settled by the settlement agreement, even though the alleged act occurred after it had been signed. The Employment Appeal Tribunal disagreed with this approach and held that unknown complaints could not be considered ‘particular complaints’ on the basis that they had not occurred at the point that the settlement agreement had been signed.

On appeal to the Court of Session, it was held that the claimant’s age discrimination claim could be validly settled by a settlement agreement as such agreement constituted full and final settlement. In particular, it was held that the settlement agreement listed various types of claims which included those based on age discrimination and that there was also a general waiver of ‘all claims … of whatever nature (whether past, present or future) and as such, any such claim that an employee does not and could not have knowledge, may be covered by the waiver. It was also clear, the Court held, that the settlement agreement intended to cover all claims of which the parties were unaware of and which had not accrued.

This decision is binding on Employment Tribunals in England and Wales. Employers should check any settlement agreement template to ensure that there is a sufficient waiver of all claims, of whatever nature (whether past, present or future) relating to the employment relationship.