Unknown future claims of discrimination cannot be waived in a settlement agreement (Bathgate v Technip UK and others)

Under section 147 of the Equality Act 2010 (EqA 2010) it is not possible to settle or compromise claims before they have arisen. Therefore a clause in a settlement agreement to waive the employee’s right to claim age discrimination was of no effect where the circumstances said to give rise to such a claim, e.g. the failure to make a pension payment, arose after that agreement. Further, a seafarer who was outside the territorial jurisdiction of the employment tribunal to bring a claim of discrimination during employment was similarly not entitled to bring a claim for post-termination discrimination after their employment had ended, according to the Employment Appeal Tribunal (EAT).

Bathgate v Technip UK Ltd and others [2002] EAT 155

What are the practical implications of this case?

There has been significant uncertainty for some time about whether or not future claims an employee might acquire against their employer but which have not yet arisen could, with the correct wording, be effectively waived as part of a settlement agreement. In this case concerning EqA 2010, Lord Summers (disagreeing with Lady Smith’s comments in McNaughton) concludes that it is not possible to settle claims that are not yet known to the employee. This is because, in his view:

• such future claims (which the agreement may purport to cover as part of a ‘rolled up’ waiver or a waiver which lists a variety of possible claims by their nature of section number) do not fall within the statutory wording of EqA 2010, which requires the agreement to relate to ‘the particular complaint’
• their inclusion would be contrary to the purpose of the restrictions on contracting out which is to protect employees from signing away their rights without a proper understanding of what they are doing.

While there is now a conflict of authorities on this issue at EAT level, it seems more likely that Lord Summers’ judgment is this case will be preferred, particularly since he explained that Lady Smith’s comments in McNaughton in respect of being able to include future claims had been influenced by the decision in Howard which was in fact about contractual rights and therefore had not included any consideration of the statutory words of relevance here, including the meaning of ‘the particular complaint’.

In the context of explaining his decision on why future claims of discrimination could not be settled before they had arisen, Lord Summers said that there is no difference in principle between a ‘rolled up’ waiver and a waiver which lists a variety of possible claims by their nature or section number. He said that:

• both are general waivers and all that distinguishes them is the particularity with which they have been drafted
• both approaches fall foul of the guidance given by the Court of Appeal in Hinton in respect of the agreement relating to ‘the particular complaint’.

Hinton is authority for the proposition that only actual or potential claims that have been raised between the parties at the time the settlement agreement is reached can be validly settled; if the claims are not yet the subject of proceedings, it is ‘good practice’ to include in the settlement agreement a brief factual and legal description of the nature of the allegations and of the statute under which they are made or the common law basis for them. This case clarifies that potential future claims cannot be validly settled if they are not known to the employee (and therefore a brief factual and legal description of them cannot be given).While there may be a temptation on the part of employment lawyers to include every possible cause of action in a settlement agreement, or to have a pro forma template to that effect, the better course is to take a realistic but broad view of what claims could potentially be relevant and to exclude those that are wholly irrelevant, as otherwise the inclusion of the latter reflects a lack of specificity in the agreement to the particular complaint(s) the individual concerned has or could have.

This case also looks at the territorial jurisdiction of the employment tribunal in respect of a seafarers claim for post-termination discrimination and finds that the seafarer would only be able to bring a claim if they fell within the jurisdiction of the employment tribunal in respect of acts that occurred during their employment. On the facts of this case the claimant’s claim of age discrimination was found to be outside the territorial jurisdiction because he worked on a vessel registered in the Bahamas which sailed outside UK and EEA territorial waters.

Court details

• Court: Employment Appeal Tribunal
• Judge: The Honourable Lord Summers
• Date: 7 October 2022

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