COT3 settlements can bar future whistleblowing claims based on the same disclosures

Background

In the case of Darlington v London Borough of Islington, the claimant was employed by the local authority at a maintained school. During her employment she raised safeguarding concerns and complained to Ofsted, which she said amounted to protected disclosures. She left her role in May 2021.

Following the provision of a negative reference by the school, she sent a letter before action in which she alleged she had been subject to whistleblowing detriment. That dispute was settled through Acas under a COT3. The agreement stated that it was in full and final settlement of all claims the claimant had or might have in the future against the school, the employer or associated individuals, whether arising from her employment, its termination or from events occurring after the agreement.

After the COT3 was concluded, the claimant applied for a role at a different school operated by the same local authority. Despite a revised positive reference being provided in line with the settlement, she was not appointed. She brought a further whistleblowing detriment claim, alleging that the refusal was again because of her earlier disclosures.

The Employment Tribunal held that the claim was barred by the COT3. The claimant appealed.

EAT decision

The EAT dismissed the appeal.

The EAT confirmed that a COT3 falls to be construed in the same way as any other contract, with the starting point being the natural and ordinary meaning of the wording used, read objectively in its context. A COT3 can lawfully compromise both existing and future claims, including claims that were not in contemplation at the time, provided the wording is sufficiently clear.

On the facts, the EAT held that the objective intention of the COT3 was to settle all existing and future claims arising from the claimant’s allegation that she had made protected disclosures during her earlier employment and had suffered detriment as a result. The wording expressly covered claims arising after the agreement and claims under the Employment Rights Act 1996.

Although the alleged detriment relied on in the later claim occurred after the COT3 and related to a different role, it was still causally connected to the same allegations of having made protected disclosures. The claimant would necessarily have had to re-litigate whether she had made protected disclosures at all, which was an issue settled by the agreement.

The EAT also agreed with the Tribunal’s alternative reasoning that the later claim arose out of the claimant’s prior employment, because it depended on events and disclosures said to have occurred during that employment.

The EAT rejected the claimant's argument that the agreement was limited to settlement of claims against Islington only in its capacity as operator of the original maintained school. The EAT considered that if this was the intention, the scope of the COT3 would have been drafted to explicitly cover this. The EAT did however note that the way in which the parties were set out could have been clearer.

Learning points for employers

This decision underlines the importance of careful drafting in COT3 agreements. Where the intention is to achieve finality, clear wording can successfully prevent future whistleblowing claims based on the same disclosures, even if the alleged detriment occurs later and in a different context. Employers should be careful to set out the proposed parties clearly to avoid further disputes to determine the scope of the agreement, particularly where the employer is part of a group.

For more information or advice, please contact Elizabeth McTeigue in our Employment team.