In the recent case of Bathgate v Technip UK and others [2022], the Employment Appeal Tribunal has held that the Equality Act 2010 does not allow for the settlement of unknown future claims even where the wording of a Settlement Agreement attempts to do so. The Claimant was therefore permitted to proceed with a claim of post-termination discrimination, despite entering into a Settlement Agreement which purported to waive his future claims.
Facts of the case
Mr Bathgate was employed by the Respondent, an offshore and onshore energy services company, as a Chief Officer for around 20 years. He worked onboard a number of vessels but spent the latter part of career aboard ‘Deep Blue’. ‘Deep Blue’ operated outside UK and EEA waters and accordingly, the Claimant’s employment was not subject to the provisions under the Equality Act 2010 (the “Act”).
For the final 6 months of the Claimant’s employment though, he worked onshore in Scotland. In December 2016, the Respondent decided there was a need for redundancies and by the end of January 2017, the Claimant accepted voluntary redundancy. As part of the redundancy process, the Claimant agreed to sign a Settlement Agreement in exchange for an enhanced redundancy payment and a further enhanced pension sum payable in June 2017, to be calculated by reference to a particular collective agreement (the “Pension Payment”).
The collective agreement in question was between the National Maritime Agency and the Nautilus Trade Union. The wording in this collective agreement was outdated and said that only persons under the age of 61 would be eligible to receive the Pension Payment. The Claimant was 61 at the time he signed the Settlement Agreement.
Because the Claimant was 61, a month after signing the Settlement Agreement the Respondent said they would not pay him the Pension Payment. This decision was not communicated to the Claimant until just before he was due to receive the Pension Payment and the Claimant concluded that this amounted to age discrimination and brought a claim.
The Respondent accepted that they did not provide the Pension Payment because of the Claimant’s age, but defended his claim on two grounds:
- The Claimant had signed a Settlement Agreement purportedly waiving future claims, and therefore he was not able to pursue an age discrimination claim after signing it;
- The Claimant could not bring an age discrimination claim because he had spent the majority of his career at sea outside of the UK and EEA. As a consequence, his employment was conducted outside of the jurisdiction of the Act and because the Claimant was deemed to operate as a ‘seafarer’, he was unable to bring a discrimination claim under the Act.
The EAT held that although it had appeared that the Claimant had signed away his rights by signing the Settlement Agreement, it concluded that the wording that was not sufficient to settle future unknown claims. The Settlement Agreement therefore did not prevent him from bringing his discrimination claim.
However, the Respondent was successful in their arguments that the Claimant was outside of the jurisdiction of the UK and therefore he had no protections under the Act, and the claim was rejected.
Summary
The standard wording in Settlement Agreements is typically amended on a case-by-case basis to ensure that any anticipated proceedings raised between the parties prior to settlement are covered and not subject to actual legal proceedings. This case is useful to see the court’s direction that future claims are not likely to be settled by a Settlement Agreement where those claims are unknown.
It is therefore important that Settlement Agreements are drafted correctly and that the wording is as specific as possible and legal advice is sought to ensure the employer benefits from as much protection as possible.
Settlement Agreements can be drafted internally, but we would always recommend they are checked by a solicitor before being provided to the employee for negotiation and/or signature.
For further information on Settlement Agreements or to discuss the issues raised by this caselaw update, please contact our Employment Group on 01276 854663 or employment@herrington-carmichael.com.
This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter.
