Can settlement agreements be used to settle future unknown claims?
In the case of Bathgate v Technip Singapore PTE Ltd 2023, Scotland’s Court of Session has held that if the settlement agreement is clear enough in its waiver then it can be used to settle future claims.
Mr Bathgate was employed between 1997 and 2017 by Technip Singapore PTE Limited as Chief Officer for a number of sea vessels. From 2008 he worked on ‘Deep Blue’ – a vessel registered in the Bahamas. His tours of duty on board the vessels lasted six weeks at a time and were mainly outside the UK or EEA waters.
In June 2016, Mr Bathgate stopped working aboard Deep Blue and began working onshore awaiting a new posting aboard a new vessel. This never materialised and towards the end of 2016 Technip started a redundancy exercise to reduce its Chief Officers. Mr Bathgate was placed at risk of redundancy in January 2017. He accepted a redundancy offer in that same month and signed a settlement agreement upon which he received independent legal advice.
Settlement waiver clause
Within the settlement agreement he agreed to waive claims and not pursue claims of age-related discrimination. The waiver was said to apply ‘irrespective of whether or not, at the date of this agreement, the employee is or could be aware of such claims or have such claims in his express contemplation’.
As part of his settlement and in negotiations with his employer, Mr Bathgate understood that he would receive an enhanced redundancy payment, notice pay and, crucially, an ‘additional payment’ which had been collectively agreed between his employer and his union the National Maritime Agency and Nautilus Trade Union. The additional payment was stated in the collective agreement to only be payable between employees from age 18 and those who had not reached their 61st birthday. By the time his contract came to an end, Mr Bathgate had reached 61 years of age and the additional payment was withheld.
Age discrimination claim
Due to not receiving the additional payment, Mr Bathgate presented a tribunal claim for age discrimination based on the fact the payment was withheld to him. He argued that the ‘particular complaint’ to which the settlement agreement related could not include any post-settlement claims, which is when his employer formally decided not to pay him the additional payment. Section 147 of the Equality Act 2010 allows for settlement of claims for discrimination if they relate to the ‘particular complaint’ and his employer defended the claim on the basis that it had, albeit it was unknown at the time.
ET and EAT hearings:
The tribunal disagreed with Mr Bathgate. It held in favour of his employer that the waiver applied regardless of whether the claim of age discrimination was in the contemplation of the parties or known at the time of settlement.
Mr Bathgate appealed to the employment appeal tribunal and succeeded in arguing that future claims could not be waived because the legislation did not allow for it.
Court of Session appeal decision
This led to the appeal at Scotland’s Court of Session which found that future claims could be settled where they are particularised in the settlement agreement as being waived even where they may not have arisen or been known at the time of settlement.
It is advisable to carefully consider and set out the particular claims that the parties are seeking to settle to ensure that the ‘particular complaint’ requirements of the legislation are met. This case clarifies that future claims can be settled where the text is plain and unequivocal as to their waiver.
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