News and Insights

This Scottish case deals with a claim for post-employment age discrimination and whether unknown future claims can be waived in settlement agreements (also known as compromise agreements). The decision will not apply directly to Jersey’s Royal Court and Employment & Discrimination Tribunal but could well be persuasive.

The claimant (Mr Bathgate) was employed by Technip Singapore PTE Ltd (Technip) for around 20 years as a Chief Officer on a number of vessels. He accepted voluntary redundancy in January 2017 under the terms of a compromise agreement. Within the compromise agreement, Mr Bathgate waived various types of claim, including those involving age discrimination under the Equality Act 2010 (EqA).

Under the compromise agreement he was due to receive two payments:

1. An “enhanced redundancy and notice payment” payable with the final salary payment; and
2. An “additional payment”, calculated by reference to a collective agreement and to be paid in June 2017 – but which (under the terms of the collective agreement) applied only to those who had not reached their 61st birthday on the relevant date.

Mr Bathgate was over 61 at the time of dismissal. The decision was taken, several months after the date of the compromise agreement and after employment had terminated, not to pay him the “additional payment”. Mr Bathgate brought a claim of post-employment age discrimination in the Scottish tribunal (the Tribunal).

Technip resisted the claim on the following grounds: 

1. The claim was validly compromised by the compromise agreement; and
2. The territorial scope of the EqA did not extend to Mr Bathgate in his capacity as a seafarer.

While the Tribunal rejected Technip’s argument on territorial scope, it also found that Mr Bathgate’s claim was invalid due to the compromise agreement.

In the following appeal, the EAT rejected the Tribunal’s findings on the basis that, for a valid agreement to settle a claim under S.147 EqA, it must relate to the “particular complaint”. The EAT did not accept that waiver of a “particular complaint” (as described in the relevant legislation about waiver of claims) could extend to waiver of future claims unknown at the date of the agreement. However, the EAT allowed Technip’s cross-appeal against the Tribunal’s finding of territorial jurisdiction, dismissing Mr Bathgate’s claim of age discrimination on this basis.

Mr Bathgate appealed to the Court of Session on the territorial jurisdiction issue, while Technip cross-appealed on the waiver/compromise agreement point. 

Mr Bathgate was unsuccessful on the territorial jurisdiction/seafarer issue. However the Court of Session allowed Technip’s cross-appeal on waiver of future claims (claims unknown to a potential claimant at the date of settlement) on the following grounds:

1. Under s.120 of the EqA, claims can be waived in a compromise agreement, including those based on age discrimination, even if they are not known at the time.
2. Under s.203 of the EqA, the purpose of the legislation is to protect claimants from signing away rights without a proper understanding of what they are doing (which is why the “particular complaint” wording is important). In this case the particularity requirement was met – the compromise agreement specifically waived age discrimination claims.
3. Under s.147 of the EqA, the settlement of future claims was permissible as long as the claim in question was clearly identified and the objective meaning of the words used was such as to encompass settlement of the relevant claim.

In summary, under Scottish law and the EqA:

• Compromise agreements can be used to waive future claims, unknown to the claimant at the date the agreement is entered into;
• However for there to be a valid waiver of such claims the agreement must refer to the “particular proceedings” or “particular complaint” being waived – a future claim being waived must be identified “in plain and unequivocal” terms.

Given the similarities between the relevant provisions of the EqA, Article 79 of the Employment (Jersey) Law 2003 and Article 40 of the Discrimination (Jersey) Law 2013, this case provides useful guidance on wording to be included in compromise agreements if future claims are to be waived.

Viberts regularly advise organisations and individuals on compromise agreements. For more information about compromise agreements please click here or contact Vicky Milner, Rebecca De Freitas or India Price.