Earlier this year, the Court of Session provided helpful clarity on the effectiveness of waivers for future unidentified claims in settlement agreements in the case of Bathgate v Technip Singapore Pte Ltd (the Bathgate case). The circumstances of that case (as is common when settlement agreements are used) concerned a termination of employment and an age discrimination claim that arose only after the signing of the agreement. Although a Scottish Court of Session decision would be influential in England and Wales, it is not binding, so Clifford v IBM United Kingdom Ltd provides helpful clarity.
Background
As an outcome of a disability discrimination related grievance, in 2012 the claimant, Mr. Clifford, was placed on IBM's long term disability Plan ("the Plan"). He also signed a settlement agreement under which it was agreed that he would receive disability salary payments at a specified level. The Plan itself indicated that increases to these payments were entirely discretionary.
Under the terms of the settlement agreement, the claimant waived the right to bring a number of claims, including disability discrimination claims, whether or not they were in the contemplation of the parties at the date of the agreement. An exception in respect of future claims was included but was stated not to apply to matters connected to the grievance, its appeal or arising from the claimant's transfer to the Plan. The claimant subsequently brought proceedings before an employment tribunal including a disability discrimination claim that since his transfer to the Plan, he had not had annual salary reviews and the level of payments he received had not increased. The employment tribunal concluded that the terms of the settlement agreement precluded the disability discrimination claims and they were dismissed as having no reasonable prospects of success.
EAT Judgement
In light of the judgment in the Bathgate case, Mr. Clifford's representative had tried to differentiate Mr. Clifford's case because his employment had continued, as well as arguing that the Bathgate case had been wrongly decided. However, the EAT disagreed, upholding the judgement of the employment tribunal. It did not accept the Bathgate case had been wrongly decided and found the continuing employment relationship in this case to be a "distinction without difference" when compared to the Bathgate case.
What impact does this have on employers?
For employers in England and Wales this judgement brings clarity that, as is the case in Scotland following the Bathgate case, appropriately worded settlement agreements can validly waive future unidentified claims. If employers want to ensure that future claims are validly waived (and this may be more important in situations such as this where employment is continuing) then advice should be sought on the appropriate wording to be used in any settlement agreement on a case-by-case basis.
Employers may also be interested to note that, although not pivotal to the final outcome in this case, the EAT also agreed with the employment tribunal that the failure to provide annual salary reviews was not unfavourable treatment because of something arising in consequence of a disability nor less favourable treatment under an indirect disability discrimination claim. It was appropriate to view the Plan as a whole rather than considering the absence of salary reviews in isolation. The Plan as a whole provided the claimant with a very substantial benefit, an advantage that was only open to him because he met the eligibility criteria due to his long-term disability. The EAT held this was "simply a complaint that a particular provision that was made for disabled employees could have been on an even more generous scale".
