Employers typically want to compromise as many claims as possible in settlement agreements offered to employees including future claims.

Clarifying some uncertainty about the ability to compromise future claims, the Court of Session in Scotland confirmed in Bathgate v Technip Singapore PTE Ltd, that settlement of a ‘particular complaint’ could include unknown future claims under the Equality Act 2010, if clearly identified. They do not have to be known, or in existence, at the time the settlement agreement is signed.

Facts

Mr Bathgate was made redundant in January 2017 and signed a settlement agreement. The settlement agreement provided for a further ‘additional payment’, calculated by reference to a collective agreement, which stated the payment applied to officers under 61 years old. Mr Bathgate was 61 when he was made redundant but expected to receive the additional payment.

The company decided not to pay him the additional payment because of his age. Mr Bathgate subsequently raised an age discrimination claim. The company argued the terms of the settlement agreement meant he could not bring the claim.

The terms of the settlement agreement settled identified claims, including under the Equality Act 2010, and age discrimination and contained a general waiver of “...all claims, demands, costs and expenses of whatever nature (whether past, present or future and whether under contract, statute, regulation, pursuant to European Union Law or otherwise)…” which the Court held was enough to preclude Mr Bathgate from continuing with his claim.

Blanket waivers in settlement agreements, such as ‘all statutory rights’, remain insufficient to waive future claims. To be effective, the particular proceedings or complaint must be adequately identified, either by description (e.g. `unfair dismissal’) or reference to the statute and section giving rise to the claim (e.g. s111 Employment Rights Act 1996).

Although not binding in England & Wales, the Scottish decision is highly persuasive and reinforces the importance of carefully drafted waivers within settlement agreements. Employers should seek to ensure particular complaints or claims are given a sufficient description and identified with reference to the statute to which they relate to.