Settlement agreements
Niki Walker, managing associate at Addleshaw Goddard, details the latest rulings.
In Kirklees Metropolitan Council v Radecki [2009] IRLR 555 CA, the Court of Appeal held that the contract of an employee with whom the employer was negotiating a compromise agreement terminated on the date that the employer stopped paying the employee, even though at that point the draft agreement had not been executed by the parties.
In Brunel University and another v Vaseghi and another EAT/0307/06, the Employment Appeal Tribunal (EAT) has held that the need to get to the truth in discrimination cases can override the rule that prevents settlement discussions between parties' representatives from being admissible as evidence.
In CMC Group plc v Zhang [2006] All ER (D) 197 (Mar) CA, the Court of Appeal has held that a clause in a compromise agreement allowing an employer to reclaim the full amount paid if the other party broke any of its terms was not valid.
In Hilton UK Hotels Ltd v McNaughton, the EAT holds that the employment tribunal was correct to find that a compromise agreement did not prevent an employee who was excluded from the employer's pension scheme during a period of part-time employment from advancing an equal pay claim.
In Hilton UK Hotels Ltd v McNaughton EAT/0059/04, the Employment Appeal Tribunal held that, where a compromise agreement included the qualification that settled claims would extend only to those that the employee 'believed' that she had at the date of her signature on the agreement, this did not preclude a future claim of which she was unaware at this time.
In Hinton v University of East London, the Court of Appeal holds that the EAT had erred in law in striking out a claim brought under s.47B of the Employment Rights Act 1996 (the right not to be subjected to a detriment for making a protected disclosure) on the basis that it was precluded by a general clause in an agreement which purported to compromise all claims arising under statute, common law or otherwise.
The Court of Appeal has upheld the decision of the High Court in Wilson (HM Inspector of Taxes) v Clayton that a payment from an employer under a compromise agreement should be treated as a termination payment under s.403 of the Income (Earnings and Pensions) Act 2003.
In Byrnell v British Telecommunications plc, the EAT holds that in a case where the applicant sought to claim a repudiatory breach of a compromise agreement so as to release himself from any obligations under it, the tribunal was correct to conclude that it had no jurisdiction to entertain claims in relation to the compromise agreement, except to satisfy itself that the compromise agreement met the requirements of s.203 of the ERA 1996 in terms of form and legal advice.
In BNP Paribas v Mezzotero the EAT holds that discussions "without prejudice" between an employer and an employee who had raised a grievance in respect of her treatment on returning from maternity leave, could be relied on by the employee in support of her sex discrimination and victimisation complaints.
Employment law cases: HR and legal information and guidance relating to settlement agreements.