Employment | Retail & Consumer
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Scottish Court of Session holds that unknown future claims can be waived by a settlement agreement if sufficiently identified .
The Appellant was employed by the Respondent as Chief Officer aboard a number of vessels until 2017 when his role was placed at risk of redundancy.
The Appellant accepted the voluntary redundancy terms on offer and, having received independent legal advice, signed a settlement agreement.
The terms of the settlement agreement provided that he would not pursue claims against the Respondent, including claims for direct or indirect discrimination on grounds of age. A further clause provided that this waiver applied irrespective of whether or not, at the date of the agreement, the Appellant was or could be aware of such claims or have such claims in his express contemplation, including such claims the Appellant became aware of after the date of the agreement.
The redundancy payment consisted of two sums: an "enhanced redundancy and notice payment" payable with the Appellant's final salary and an "additional payment". The additional payment was to be calculated by reference to a collective agreement between the employer and its relevant trade union.
Discussions with the Respondent during the redundancy process led him to believe that he would receive the additional payment. However, at the date of his redundancy he was 61 years old. The collective agreement stated that the additional payment applied to all officers who had not reached their 61st birthday. Accordingly, the Respondent decided that the Appellant was ineligible for the additional payment.
The Appellant brought an Employment Tribunal claim on the grounds of direct and/or indirect age discrimination. The Respondent successfully defended the initial claim, on the basis that the age discrimination claims had been validly settled in the settlement agreement.
The Appellant brought an appeal at the Employment Appeal Tribunal (EAT) on the basis that for a settlement agreement to be valid, it must refer to a “particular” complaint, which is not possible where the complaint was not known to the parties at the time of settlement. The EAT agreed, and held that the requirement that the settlement agreement "relates to a particular complaint" prevented the waiver of an unknown future claim.
The Respondent appealed to the Court of Session, which held that a future claim of which an employee does not and could not have knowledge "may be covered by a waiver where it is plain and unequivocal that this was intended". It ultimately decided that future claims can be settled under a settlement agreement provided the envisaged types of claim are clearly identified, and the objective meaning of the words used encompasses settlement of the relevant claim.
This is a Scottish Court of Session decision which, although not binding in England and Wales, will likely be considered in the event of similar claims under our jurisdiction.
The Claimant was a long-standing employee of the Respondent with a clean disciplinary record.
The Respondent was rolling out race education training.
During one of the training sessions, the Claimant asked how he should handle a situation where he heard someone from an ethnic minority use a word that might be considered offensive if used by someone not within that minority. He added, "the most common example being use of the N word in the black community". However, the Claimant used the full word rather than the abbreviation.
After the session, the training provider reported the Claimant's use of language to the Respondent.
The Respondent conducted an internal investigation followed by formal disciplinary action.
During the disciplinary process, it was raised that the Claimant's dyslexia meant that it could take the Claimant time to form verbal questions and that it could take the Claimant numerous attempts to articulate a question. It was suggested that the Claimant was probably trying to formulate a complex question and fell onto the word inadvertently.
The Respondent accepted that the Claimant did not intend to cause any hurt, that he asked the question with no malice, and that the question itself was valid. However, it considered that the Claimant should have known better than to use the full word in a professional environment and he should have realised that it could have serious impact. Although the Claimant had apologised immediately and not repeated the word, the Respondent was told that the trainer had been off work for 4 – 5 days as a result. The Respondent dismissed the Claimant for gross misconduct.
The Claimant appealed the decision. As part of the appeal process, an occupational health report was obtained on the Claimant's dyslexia. However, the Claimant's appeal was dismissed.
The Claimant brought an Employment Tribunal claim on the grounds of unfair dismissal, disability discrimination and race discrimination.
The Employment Tribunal upheld the Claimant's claims of unfair dismissal and disability discrimination. However, his claim for direct race discrimination (i.e. that a hypothetical black comparator would have been treated differently in the same circumstances) failed.
The Tribunal accepted that the Claimant's use of the "N word" was likely to cause significant discomfort and should never be used in a professional environment. However, it found that no reasonable employer would have dismissed the Claimant in the circumstances.
In particular, the following matters were relevant to this matter:
The Employment Tribunal accepted that the Claimant's dyslexia was a strong factor causing how he expressed himself at the session. The Claimant had been dismissed because of something arising in consequence of his disability.
The Employment Tribunal remedy decision awarded the Claimant over £470,000 in compensation.