Generally speaking, workers cannot agree to contract out of their rights to bring a tribunal claim. This rule does not apply, however, if they want to settle a dispute once and for all by signing a compromise agreement that satisfies certain statutory requirements.

In Hinton v University of East London (IDS, 782) the Court of Appeal has now said that, to compromise a potential claim, the agreement has to specifically identify the claim, either by describing it or by referring to the relevant section of the statute.

 

What was the background to this case?

Dr Hinton, a senior lecturer with the University of East London, took voluntary redundancy in July 2003 and signed a compromise agreement that purported to settle all outstanding claims that he has or "may have".

The agreement then set out a long list of claims that had been compromised. However, it did not refer to whistleblowing claims under section 47B of the 1996 Employment Rights Act (ERA) which protects employees from being disadvantaged by their employers if they blow the whistle. This was remarkable because Dr Hinton had previously complained that he had been.

When Dr Hinton then brought a tribunal claim on that basis, the tribunal had to decide whether his claim had been compromised. It decided that it had not, since the agreement did not specifically refer to the complaint he was bringing.

The appeal tribunal, however, disagreed, saying that the list was only meant to be illustrative and not exclusive. It said that the general settlement clause was enough to compromise his claim.

 

What does the law say?

Compromise agreements are governed by the law of contract and by section 203 of the 1996 ERA. Basically it says that employers cannot enforce agreements that stop their workers from bringing tribunal proceedings.

However, the statute does not "apply to any agreement to refrain from instituting or continuing...any proceedings" as long as the conditions regulating compromise agreements are satisfied, as follows:

  • They must be in writing
  • The employee must get independent legal advice before signing
  • They must relate to the "particular proceedings"

 

What did the Court of Appeal decide?

The Court had to decide, first of all, whether Dr Hinton's claim was covered by the compromise agreement, from a contractual perspective. If it was not, he could pursue it, irrespective of what section 203 said.

However, the Court decided the terms of this agreement were wide enough to cover the section 47B claim raised by Dr Hinton against the University. The agreement "made it as plain as it could be that the intention of the parties was to settle all their differences, actual and potential, arising under statute and at common law."

It was not, therefore, contractually necessary for an effective compromise agreement to refer expressly to section 47B or to the legal nature and factual basis of Dr Hinton's allegations that he had been disadvantaged from having blown the whistle.

But did the agreement relate to the "particular proceedings" under section 203? The Court said that the opening part of clause 9 was very general, referring to all claims "arising under statute", but did not mention any particular statute. And although it related to "proceedings", it did not relate to "particular proceedings."

This was fatal to the university's case. It said that it was not enough to use a rolledup expression such as "all statutory rights". To comply with section 203, "the particular claims or potential claims to be covered by the agreement must be identified, either by a generic description such as 'unfair dismissal' or by reference to the section of the statute giving rise to the claim."