A recent EAT decision, Arvunescu v Quick Release Automotive [2022] EAT 26, considered the wording of a COT3 agreement (a form of settlement facilitated by ACAS). While in the process of negotiating the agreement, the claimant expressed an interest in a role at one of the (UK) respondent employer’s subsidiaries in Germany. When the claimant asked the respondent for a reference, its UK HR team said that it had no control over the hiring process in Germany. Shortly afterwards, the German subsidiary stated that it was unable to offer the claimant a position.
A few weeks later, the claimant finalised his COT3 agreement with the UK-based respondent, in which he agreed to waive all claims ‘out of or in connection with’ his employment. Nonetheless, he then attempted to bring a claim against the respondent, essentially alleging that it had victimised him by arranging for him not to receive the German post.
Perhaps predictably, the respondent sought to strike out the claim on the basis that it had reached a seemingly final COT3 agreement. However, if the respondent intervened in recruitment for the German role, was that in connection with the claimant’s employment and therefore waived?
The EAT concluded that it was. While it is a matter of interpreting each agreement, here the EAT pointed towards the generally broad and conclusive tone of the waiver wording in the COT3.
The drive to reach a conclusive resolution often leads to very wide waiver provisions of that kind in settlement and COT3 agreements. Often, the wording not only attempts to settle existing and potential disputes, but also to preclude the worker or employee from bringing future claims relating to their role. However, the question of whether it is possible to require individuals to give up their future claims in this way has been contentious, particularly where the worker may be forgoing their statutory rights.
That may partly be because of the importance of rights such as those not to be discriminated against or unfairly dismissed. More specifically, however, laws such as the Employment Rights Act 1996 and the Equality Act 2010 (amongst many others) require that a settlement agreement relates to a ‘particular complaint’.
Accordingly, it has been open to question whether claims which have not yet come into being – and might relate to facts which neither worker nor employer can possibly be aware of as at the date of the settlement – can meet that description and validly be settled.
The question did not strictly arise in Arvunescu as the claimant was aware of his unsuccessful application for the German role at the point of signing his COT3 agreement. The EAT did, however, address the issue in the recent case of Bathgate v Technip [2022] EAT 155.
In Bathgate, the claimant was a seafarer who, after a lengthy career with the respondent, took voluntary redundancy. The settlement agreement provided for him to receive an ‘Additional Payment’, calculated in accordance with a separate union-negotiated agreement. It was later decided that the claimant was not eligible for this Additional Payment due to his age. In response, he brought a claim for age discrimination under the Equality Act 2010. In reply, the employer argued that the claimant had waived all of his claims, including claims arising after he had signed his settlement.
The EAT concluded that this was not possible under the Equality Act. While acknowledging that some parties may well want to provide for that kind of conclusive outcome, that had not been Parliament’s intention when it stated that only a ‘particular complaint’ could be settled. On the other hand, it is still possible to settle claims which a claimant might have at the time of signing, even if they have not yet been put before a Tribunal.
The issues revealed by these cases are not simply technical – they go to the heart of whether apparently final settlements offer the reassurance hoped for. In the Bathgate case, for example, but for other legal issues, the claimant might ultimately have been allowed to pursue his claim irrespective of the previous settlement. The message is clear: while in most cases settlements offer a welcome degree of finality, they have to be approached with care and with an appreciation of their limits.
