Case Law - Future Claims Are Validly Settled Under A Settlement Agreement

Clifford v IBM United Kingdom Ltd [2024] EAT 90

The Claimant had been absent from work due to his disability from 2008 onwards. In 2013, he entered into a settlement agreement following his grievance against the Respondent, which included their failure to move him to its disability plan.

The settlement agreement terms reached included moving the Claimant to their disability plan and salary payments at a specified level.  The Claimant received independent legal advice on the terms of the settlement agreement.

The settlement agreement waived all claims of Mr Clifford’s against the Respondent, regardless of whether he knew about them at the time of the agreement. The waiver did not extend to claims that arose after the date of the agreement, but only to the extent those future claims were unrelated to the Claimant’s grievance or the transfer to the disability plan – i.e. the facts and circumstances that gave rise to the settlement agreement.

Nine years later, he brought claims in the employment tribunal stating that a lack of salary reviews and salary increases he would have received if he were still in work, amounted to discrimination. The Respondent argued that these claims were within the scope of the waiver in the 2013 settlement agreement. The tribunal agreed with the Respondent.

The Claimant appealed, and the EAT upheld the decision of the ET. It ruled that there was nothing in law which prevented future claims from being settled, provided that appropriately clear language is used. In particular, the EAT highlighted that the law does not restrict the kinds of claims that can be settled, but how they must be settled.

The key factor in reaching this determination was that the waiver of claims was not a “blanket waiver” but applied to claims related to his grievance and the move to be put on the Respondent’s disability plan. This therefore met the test that claims waived must relate to “the particular complaint” that gave rise to the settlement agreement.

This case reiterates the importance of ensuring settlement agreements are suitably worded, and only include waivers arising from the facts that gave rise to the agreement in the first place.