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Employment Law Case: Bathgate v Technip UK Ltd (2022) EAT 155 and the impact to Settlement agreements

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Joanna Rose · Posted on: May 17th 2023 · read

Bathgate v Technip UK Ltd (2022) EAT 155 and the impact to Settlement agreements

In October 2022 the binding decision of the Employment Appeal Tribunal (EAT) had held that a settlement agreement cannot waive future claims that have not arisen at the date the agreement was signed.

Settlement agreements (previously named compromise agreements) can be a very effective tool used in a number of different employment scenarios. In this instance Mr Bathgate took voluntary enhanced redundancy and signed a settlement agreement in January 2017. In return his employer agreed to make enhanced payments for settling any claim.

One of the payments was not calculated at the point that the agreement was signed but confirmed that it would be calculated in line with a Collective Agreement in place. This agreement however only applied to staff under the age of 61 and Mr Bathgate was 61 at the time of signing. Ultimately the employer decided not to make this payment to Mr Bathgate. In response, Mr Bathgate made a claim arguing that by not making the agreed payment it amounted to age discrimination. The Tribunal held that he could not proceed with the claim as he had waived his right to make any age discrimination claims under the settlement agreement.

Mr Bathgate appealed and the EAT disagreed with the original tribunal decision noting that the waiving of his right to sue for age discrimination took place prior to knowing whether he had a claim or not. The EAT therefore decided that in accordance with the relevant legislation, settlement agreements could not settle future claims that have not arisen at the date of the original agreement.

What does this mean for you?

The recent EAT decision is different from what was previously understood from case law. It is therefore essential that you are aware of the risk of future risk of litigation. It would be advisable for you to take advice on the specific circumstances to ensure that the particular claims now and in the future are identified. You may already have a template in place for Settlement Agreements and it would be advisable for this to be reviewed and updated where necessary. HR Solutions are able to review existing documents or draft new documents should you require this.