Employment tribunal and court judgments | June 2024

Welcome to our monthly update, where we share recent employment cases of interest and the practical considerations for employers.

The Claimant worked as a Majid Liaison Officer (MLO), involved in raising funds for the Respondent’s charity. Other employees performed the same or similar roles in different locations. During the pandemic the Claimant was dismissed as redundant and placed in a pool of one. Three consultation meetings were held, however there was no consultation about the appropriateness of the pool. An Employment Judge found that his dismissal was fair, accepting the Respondent’s case that the Claimant’s role was ‘unique’.

The Claimant appealed and contended that the Tribunal failed to address a material issue of the employer not carrying out a fair consultation in relation to being placed in a pool on his own.

The appeal was allowed. The Tribunal appeared to have accepted the Respondent’s case that the Claimant’s role was unique, without considering the evidence that other employees performed the same role, although in different locations. The Respondent had not consulted with the Claimant about the pool for selection. The Tribunal had also failed to consider whether choosing a pool of one was a reasonable approach in this particular case.

Rationale of choosing the pool

Employers need to explain why they have chosen the pool selected for redundancy and be willing to discuss that choice in consultation. An employer must have genuinely applied their mind to the question of the pool from which employees should be selected. The selection of that pool must come within the range of reasonable approaches open to a reasonable employer.

Factors to consider when determining the pool include:

  • The similarities and differences of roles between employees (possibly even if they are performed at different locations). This goes beyond what is stated in the employment contract or job title.
  • The extent to which any employee roles are interchangeable.
  • Whether the section pool was agreed with the union or employee representatives, if appropriate.

Meaningful consultation

There must be a ‘meaningful’ consultation where the affected employee could influence or potentially affect the outcome.

As the EAT made clear, meaningful consultation means setting out a provisional proposal, along with the rationale, and providing an opportunity for feedback, comments or observations. A decision maker should consider the responses through consultation with an open mind, considering whether they alter the initial proposal. Only then should the employer make a decision.

The Claimant was absent from work due to illness from September 2008. In 2012, he brought a grievance against the Respondent. This grievance outlined the Respondent’s failure to transfer him to its disability plan. He was transferred to the disability plan and signed a settlement agreement, expressly excluding future claims from the scope of the agreement, but only those which were “(i) not connected with the matters set out in the grievance or appeal; or (ii) do not arise out of the Claimant’s transfer to the disability plan”.

The Claimant argued that he had been discriminated against on the grounds of disability because, since his transfer to the disability plan, he had not had an annual salary review, his salary had not been increased and his annual leave payments had been at a reduced rate compared to employees not on the disability plan. At a preliminary hearing, the claims were struck out as the judge viewed the new disability plan as beneficial to the claimant, not placing him at a disadvantage.

The Claimant’s appeal was dismissed. The judge stated that the terms of the settlement agreement covered future discrimination claims connected to the Claimant’s grievance or arising out of his transfer to the disability plan, whether or not they were contemplated by the parties.

The second issue was whether the settlement agreement complied with s.147(3)(b) of the Equality Act 2010 that ‘the contract relates to the particular complaint.’ The Tribunal’s reasoning followed the Scottish Court of Session decision in Bathgate v Technip Singapore PTE Limited, reiterating that there was nothing in the relevant statutory language that precludes the settlement of future claims provided that appropriately clear language is used.

This case has now confirmed the decision in Bathgate as binding in the courts of England and Wales (unless appealed and overruled). It confirms that:

  • Statutory rules about settlement agreements do not prevent the settlement of future claims, so long as the types of claim are clearly identified and the wording in the agreement covers the relevant claim.
  • Where s.147(3)(b) Equality Act 2010 states that the agreement must “relate to the particular complaint” it does not mean that the complaint must have existed or been known of at the time of the agreement.
  • The complaint must be specific and identified in the agreement, however and there should not be a general waiver of all claims.

A settlement agreement may settle future claims in the same way as COT3 (although using a COT3 may be advantageous e.g., in mass settlement exercises).