Labour & European Law Review Weekly Issue 224 30 June 2011
Section 77 of the 1975 Sex Discrimination Act (SDA) sets out the requirements for a compromise agreement to be valid. In McWilliam and ors v Glasgow City Council, the Employment Appeal Tribunal (EAT) held that the solicitors engaged by the Council to provide advice to potential claimants were capable of acting as independent advisors.
Glasgow City Council set up a panel of solicitors towards the end of 2005 to give advice to employees about their equal pay compensation rights.
The Council and the solicitors agreed a draft compromise agreement which the solicitors explained to employees at a series of presentations. They made clear that they could not advise individual employees about whether they should sign and that, by signing, they were agreeing not to lodge an equal pay claim. They emphasised at the presentations that the employees did not have to sign the agreement that day. Ms McWilliam and a number of her colleagues all signed up but then lodged equal pay claims 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.”
Section 77(4B) states that an advisor who is “employed by or is acting in the matter for the other party or a person who is connected with the other party, …” cannot act as a “relevant independent advisor”.
The Tribunal dismissed the women’s claims, saying that section 77 just required claimants to be advised about the actual terms of the compromise agreement and what they meant and not whether or not the offer represented a “good deal” at an individual level.
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, as that was not relevant, it concluded that the requirements of section 77 had been met.
The EAT rejected the women’s appeal, saying the agreement did not have to relate to a 'particular complaint' that had already been lodged at a Tribunal. Both parties just had to know which “particular complaint” the compromise agreement related to and that it could not be litigated in the future.
It would be absurd, said the EAT, “to insist that the time, trouble and expense ... that are liable to be involved in presenting a claim to an Employment Tribunal have to be incurred before a valid compromise agreement can be entered into”.
It also rejected the argument that the women had not received 'advice' as to the terms and effect of the agreement. It said that the advice given at the group presentations was incorporated into the advice given by the individual solicitors and that “once all these communications were taken into account, advice had been given on the terms and effect of the compromise agreements”.
Section 77 did not require the independent adviser to offer a view as to whether or not the deal was a good one, nor whether the employee should accept it.
Finally, it dismissed the argument that the solicitors were acting “in the matter” for the Council. Whilst accepting that the solicitors did not begin acting for the women until the individual solicitor / client meetings they were all, prior to that, acting to protect the interests of a group of potential clients and there was no question of them acting for the Council.