Navigating allegations & bias: Lessons from Virgin Active Limited v Hughes
The importance of proper assessment of comparators to ensure fairness in employment discrimination cases.Read more
The claimant, who was aged over 61, signed a settlement agreement as part of a voluntary redundancy package. The settlement agreement included enhanced redundancy and notice entitlements, and also an additional sum calculated by reference to a collective agreement. Notably, there was no requirement in the collective agreements for additional payments to those over 61.
When that change was communicated to the claimant, he sought to bring an age discrimination claim. In response to his claim, the employer argued that the claim had been compromised by the settlement agreement and so it could not proceed at the employment tribunal.
The employment tribunal sided with the employer as it concluded that the settlement agreement included a waiver of “all claims…of whatever nature (whether past, present or future)”.
The case was appealed and the EAT allowed the claimant’s appeal on this point. While the claimant had signed away a long list of claims, including age discrimination claims, the EAT did not accept that this identified the particular claim as required by section 147 of the Equality Act 2010.
Section 147 allows employment claims to be compromised by way of a settlement agreement that “relates to a particular complaint.” Lord Summers (who heard the claim in the EAT) was of the view that the use of those words demonstrated that when passing the legislation, Parliament anticipated the existence of an actual complaint or circumstances where the grounds for complaint existed. Unfortunately for the claimant, the appeal also concerned a jurisdictional point in which he was unsuccessful, and for this reason the EAT ruled that the claim could not succeed.
This case highlights that it is only possible to waive statutory employment claims when an actual complaint exists or circumstances exist that may give to grounds for a complaint. In this case, the circumstances giving rise to the age discrimination claim only came to light after signing a settlement agreement and therefore could not be waived under the agreement.
As a result of this finding, employers may see a change of direction and possibly an increase of litigation on the validity of waivers, which emphasises the importance of carefully drafted settlement agreements.
For assistance negotiating and writing settlement agreements, contact our team on 01332 226 155 or complete the form below.
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