Unknown future claims can be waived

In the recent case of Bathgate v Technip Singapore PTE Ltd, the Court of Session found that a settlement agreement can settle future unknown claims provided that they have been plainly and unequivocally identified in the settlement agreement.

This is a Scottish Court of Session decision, so it isn’t technically binding on tribunals in England. However, as it deals with legislation that applies across both Scotland and England, it is highly likely to be followed in England.

Settlement agreements

The Equality Act 2010 lays down conditions for settling a claim using a qualifying settlement agreement. One of the specified conditions is that "the contract relates to the particular complaint".

Facts

Mr Bathgate was employed from 1997 as a Chief Officer abroad various vessels by Technip Singapore PTE Ltd (Technip). In January 2017, Mr Bathgate accepted voluntary redundancy, which was formalised in a settlement agreement. The settlement agreement contained a specific waiver which set out a list of claims, including age discrimination. There was also a general waiver which included future claims. Under the agreement, Mr Bathgate was entitled to get various payment including an additional payment in June 2017, to be calculated with reference a collective agreement.

In March 2017, Technip decided that the additional payment did not need to be paid to employees who, like Mr Bathgate, were over 60 years old at the date of termination. In June 2017, Mr Bathgate brought an age discrimination claim in the tribunal. Technip resisted the claim on the ground that the claim was validly compromised by the settlement agreement.

The employment tribunal agreed with Technip and found that the claims of age discrimination were validly waived. The Employment Appeal Tribunal allowed the appeal and held that the settlement agreement could not settle Mr Bathgate’s unknown future claims.

Decision of the Court of Session

On appeal, the court found that a settlement agreement can waive unknown future claims where the waiver of such claims is plain and unequivocal. The settlement agreement in this case clearly covered future claims and listed the age discrimination claim specifically. Mr Bathgate’s age discrimination claim was therefore validly waived and he was unable to pursue it.

Comment

Employers will be relieved to see this return to a more certain position regarding the ambit of settlement agreements. Whilst it might seem unfair that Technip was able to rely on a settlement agreement that was signed before the age discrimination claim even arose, it shows the power and reach of a well drafted settlement agreement.

The court did not directly address whether unknown future claims could still be waived where an employee is still in employment, although there was some suggestion that it may be harder to enforce in such a situation.