McWilliam and ors v Glasgow City Council
Section 77 of the 1975 Sex Discrimination Act (SDA) says that employees must have had independent legal advice from an adviser for a compromise agreement to be valid. InMcWilliam and ors v Glasgow City Council, the employment tribunal held that although independent advisers must explain the proposed settlement and its implications, they are not there to help employees decide whether they are being offered a good deal.
Following an agreement with the relevant trade unions to settle its equal pay liability, Glasgow City Council set up a panel of local solicitors to give advice to individual employees about their equal pay compensation rights towards the end of 2005.
The Council then wrote to a number of employees who were being offered a settlement payment. It asked them to attend a briefing session where it said they would be given details of the individual offer, information about the compromise agreement and the implications of signing it.
The employees then attended a series of presentations at which the solicitors explained that they could not advise individual employees about whether it was a good deal for them personally. They made clear though that, by signing, the employee was agreeing not to lodge an equal pay claim. They concluded the presentation by emphasising that they did not have to sign the agreement that day.
Each compromise agreement stated that the employee would not bring an equal pay claim up to and including 20 November 2005. Ms McWilliam and a number of her colleagues all signed up but then lodged equal pay claims against the Council for that period on the basis that the advice they had received did not fulfill the requirements of section 77 SDA.
Section 77(4)(A)(c) of the SDA states that “the complainant must have received advice from a relevant independent adviser as to the terms and effect of the proposed contract and in particular its effect on his ability to pursue his complaint before an employment tribunal.”
The tribunal dismissed the women’s claims in so far as they related to the period compromised by the agreement - that is, up to and including 20 November 2005.
The tribunal said that section 77 just required claimants to be advised about the actual terms of the compromise agreement and what they meant. “For example, what is the scope of the agreement, what claims are being compromised, how will any payment be treated for tax and so on....If there are terms in the contract that the employee did not understand, additional advice might be given on that during the individual presentation. However, it is not in my view necessary that an assessment is made of whether or not it is a “good deal”.
The judge accepted that it was unfortunate that the women had not received advice as to what they might have been awarded, had they been successful. However, that was not relevant to the issue before the tribunal and it concluded that the requirements of section 77 had been met.
It also said that although the Council had paid the solicitors’ fees, that did not affect their independence in any way.
This case demonstrates the need for specialist advice when dealing with compromise agreements. If the process is not handled correctly, problems will and can arise. It was with some reluctance that the tribunal agreed that the employees were correctly advised. Unless a clear and comprehensive advice process is followed, employees entering into such agreements will only be left feeling disgruntled.