Disability discrimination claim | Post Settlement Agreement

In the recent case of Clifford v IBM United Kingdom Ltd, the Employment Appeal Tribunal held that the Employment Tribunal was correct to strike out a Claimant’s claims for disability discrimination, on the basis that the claims were barred by a settlement agreement entered into a number of years ago.

The Claimant, an employee of IBM, the Respondent, was continuously absent from work due to ill health since September 2008 and had not worked since. His complaints included:

• ongoing and proposed deductions from his salary (reduced pension contributions);
• not having a salary increase since 2008; and
• not receiving holiday pay for the period of his sickness absence and failing to transfer him to the Respondent’s Disability Plan.

Following the determination of the grievance and a related appeal, it was agreed that the Claimant would be moved to the Respondent’s Disability Plan on 6 April 2013. The parties entered into a settlement (compromise) agreement and the Claimant did so having received legal advice from a specialist employment law solicitor, in accordance with s.147(3) of the Equality Act 2010. The agreement included the following wording:

“On 25 September 2012, you lodged a formal grievance against IBM United Kingdom Limited… On 23 November 2012, IBM provided its response to the Grievance… On 5 December 2012, you appealed against the Respondent… On 1 March 2013, IBM responded to the Appeal…

In the Grievance, the Appeal and elsewhere you allege that you have or may have potential claims arising from your employment with IBM which include: unlawful deductions from wages, breach of contract, disability discrimination and other claims referred to in the Grievance and Appeal (“Employment Claims”).

This Agreement settles the Employment Claims. In addition, it reflects the intention of you and IBM and all of the Group Companies that this Agreement should also settle any other claims that you may have against IBM or any other Group Company, subject to and in accordance with the terms set out below.”

In February 2022, the Claimant subsequently issued his claim that his absence from work, being placed on the Disability Plan, and his inability to perform his duties was ‘something arising’ from his disability. The Claimant argued that if he had not been disabled, he would have continued to perform his role, he would have had an annual salary review and annual salary increase each year, and he would have been paid in full for his contractual annual leave entitlement.

The Employment Tribunal struck off the Claimant’s claim at a preliminary hearing on the basis that it was precluded by the settlement agreement and the claim had no reasonable prospects of success. The Claimant appealed to the Employment Appeal Tribunal stating that it was not possible to contractually compromise future claims. The EAT held that the pleaded claim plainly fell within the terms of the waiver in the settlement agreement, which covered future discrimination claims connected to the grievance or arising out of the Claimant’s transfer to the disability plan, whether or not they were contemplated by the parties. The EAT considered that the only issue to be determined was whether the settlement agreement complied with the requirement in s.147 of the Act that ‘the contract relates to the particular complaint’, which the EAT held that it did.

The case serves as a useful reminder that the purpose of a settlement agreement is to achieve a clean break between the parties, and indeed they can compromise future claims either known by the parties or potentially if the future complaint is the subject of existing facts known to the parties.

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