Waiving future discrimination claims under a settlement agreement

What were the facts of the case?

In the case of Clifford v IBM United Kingdom Ltd, the claimant, Mr Clifford, worked for IBM and had been absent from work due to ill health since 2008. In 2012, he brought a grievance against IBM which included a failure to transfer him to the company's disability plan. The parties entered into a settlement agreement in April 2013, whereby they agreed that the claimant would move to the disability plan and receive disability salary payments. His employment was to continue.

Under the settlement agreement, the claimant waived the right to bring various claims including claims for disability discrimination, whether or not the claims were or could be in the contemplation of the parties at the date of the agreement. The claimant was to be permitted to bring future claims, save for claims relating to the grievance or to the claimant's transfer to the disability plan.

Tribunal claim

Several years later, the claimant brought disability discrimination claims against IBM. He argued that, since his transfer to the disability plan, his salary had not been increased compared to employees not on the disability plan and he had not had annual salary reviews.

The tribunal struck out the claim on the basis that it lacked jurisdiction because the disability discrimination claim was precluded by the settlement agreement. The claimant appealed.

EAT decision

The EAT dismissed the appeal. The tribunal was right to conclude that the pleaded claims fell within the terms of the settlement agreement waiver. The EAT reaffirmed the ruling in Bathgate v Technip Singapore PTE in which the Scottish Court of Session found that unknown future claims can be waived under an appropriately worded settlement agreement. The scope of that decision had been the subject of some discussion as the claimant in that case was a former employee whose employment was not continuing. This decision confirms that, at least in some circumstances, a specific future claim can be precluded by a settlement agreement, whether or not employment is continuing.

Learning points for employers

Employers should be aware that well-drafted settlement agreement can preclude unknown future claims that have not arisen at the date of the agreement. Care must be taken to ensure any waiver is sufficiently clear in relation to its scope.

Employers should note that whilst this decision relates to a claimant whose employment was continuing, the facts of this particular case are unusual in that the claimant was an "inactive" employee. It would not necessarily be the case that the EAT would reach the same decision in respect of an employee who has continued in an "active" employment relationship.

For more information or advice, please contact Alastair Fatemi in our Employment team on 0117 314 5236, or complete the form below.