In the case Hinton v University of East London, the Court of Appeal has overturned the decision of the Employment Appeal Tribunal (EAT) and confirmed the original employment tribunal's findings.

Dr. Hinton, a lecturer at the University of East London, complained of detrimental treatment by the University after he had made protected disclosures, under the provisions of section 47B of the Employment Rights Act 1996 (ERA). The University entered into a compromise agreement with Dr. Hinton, under which he was required to agree not to pursue the complaint before an employment tribunal. A compromise agreement, under which an employee contracts out of the right to bring tribunal proceedings, is void if it does not meet the statutory requirements, among which is a requirement in section 203(2)(b) that "the agreement must relate to the particular proceedings".

The compromise agreement with Dr. Hinton stated: "This Agreement is made…in full and final satisfaction of all claims in all jurisdictions…including in particular the following claims which have been raised by or on behalf of the Employee as being claims which he may have". The document then listed eleven different jurisdictions, some of which were not relevant at all to Dr. Hinton's situation. In particular, the list failed to make any reference to section 47B of the ERA, which was specifically the jurisdiction at issue.

The employment tribunal decided that section 47B was a "grave omission" from the Agreement and was not caught by the general wording "all claims in all jurisdictions". As a result, the section 47B claim was not contractually compromised. The tribunal said: "In effect, this was a badly drafted agreement."

On appeal, the EAT overturned the tribunals decision. It ruled that the wording "all claims in all jurisdictions" did cover section 47B, as the list of eleven jurisdictions was illustrative, not comprehensive.

Although the Court of Appeal was, like the employment tribunal, surprised that reference to section 47B was omitted in the agreement, it did not disagree with the EAT's view that the omission was, in itself, a problem. Section 47B was caught by the reference to "all claims in all jurisdictions".

However, the Court focussed its attention on the requirement in section 203(3)(b), that "the agreement must relate to the particular proceedings". It took the view that the wording "all claims in all jurisdictions" was too general; it should have referred to the "particular proceedings" that were to be compromised by the agreement, in this case detriment on the grounds that Dr. Hinton had made a protected disclosure.

The Court of Appeal, as a result, upheld the findings of the employment tribunal and decided that the EAT had erred in law. Mr. Hinton's complaint can therefore be considered on its merits.

Lord Justice Mummery provided the following practical guidance on the drafting of compromise agreements in order for them to meet the section 203(3)(b) requirement. They must be noted by all employers and their advisers when drafting compromise agreements in future.

1. If actual proceedings are compromised (i.e. the case has already gone before an employment tribunal) it is good practice for the particulars of the proceedings and of the particular allegations made in them to be inserted in the compromise agreement in the form of a brief factual and legal description.
   
   
2. If the compromise is of a particular claim raised which is not yet the subject of proceedings (as in Dr. Hintons's case), it is good practice for the particulars of the nature of the allegations and of the statute under which they are made or the common law basis of the alleged claim to be inserted in the compromise agreement in the form of a brief factual and legal description.

In the detail of its decision, the Court of Appeal confirmed that a single compromise agreement could cover encompass claims brought under more than one jurisdiction. However, Lady Justice Smith added:

"I would add that I would not regard it as good practice for lawyers to draft a standard form of compromise agreement which lists every form of employment right known to the law. Compromise agreements should be tailored to the individual circumstances of the instant case. Only in that way can the purpose behind this provision be fully satisfied."

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Source:
England and Wales Court of Appeal (Civil Division) Decisions