In Clifford v IBM United Kingdom Ltd [2024] EAT 90 the EAT held that:
- future claims can be waived in a settlement agreement so long as appropriately clear language is used;
- this is the case irrespective of whether it is a ‘clean break’ end of employment situation or the parties remain in a continuing employment relationship.
The settlement agreement was signed by the parties following the claimant’s continuous absence from work due to ill health and his submission of a grievance against his employer.
The claimant was continuously absent from work as a result of ill-health from September 2008 and has not worked since. In 2012 he pursued a grievance relating to various matters including the failure to transfer him to the respondent’s Disability Plan. Under the terms of the settlement agreement, the respondent agreed that the claimant would move to the Disability Plan and receive disability salary payments at a specified level. The terms of the Plan indicated that an increase in these payments was discretionary. Under the terms of the settlement, the claimant waived the right to bring various specified claims, including disability discrimination claims, whether or not they were or could be in the contemplation of the parties at the date of the agreement. An exception in respect of future claims did not apply to matters connected to the grievance or its appeal or arising from the claimant’s transfer to the Disability Plan.
Applying the Court of Session’s decision in Bathgate v Technip Singapore PTE Ltd [2023] CSIH 48, the EAT held that future claims could be validly compromised even if unknown to an employee at the time of concluding a settlement agreement. Unlike the claimant in Bathgate whose employment had ended, the claimant’s employment continued as an “inactive” employee in receipt of benefits under the employer’s disability plan. However, the EAT found that this distinction was a distinction without a difference in this particular case.
The EAT accepted IBM’s submission that section 147(3) of the EqA 2010 regulates how the parties enter into a statutory settlement agreement rather than constraining the kinds of claims that can be settled. It remarked that it was clear from the Court of Appeal’s decision in Arvunescu v Quick Release (Automotive) Ltd [2022] EWCA Civ 1600 that future claims can be settled by means of a COT3.
There was no sensible basis, in terms of the legislative wording or policy objectives, for drawing a distinction between statutory settlement agreements and COT3s for these purposes.
Mr_Ian_Clifford_v_IBM_United_Kingdom_Ltd__2024__EAT_90.pdf (publishing.service.gov.uk)
