Hinton v University of East London

Key principles: A compromise agreement is governed by ordinary contract principles and by section 203 of the Employment Rights Act 1996. Section 203 renders general waivers of the right to bring tribunal proceedings void, but permits valid compromise agreements provided statutory conditions are satisfied, including that the agreement "must relate to the particular proceedings" (s203(3)(b)).

The Court of Appeal held that the parties' settlement document was, on its contractual construction, wide enough to cover the appellant's anticipated claim under section 47B (public interest disclosure) but that it failed to satisfy the statutory requirement in s203(3)(b) because it did not identify or sufficiently describe the particular proceedings intended to be compromised. Thus the statutory safeguards were not met and the agreement did not preclude the section 47B claim.

Background and parties: The appellant, Dr David Hinton, and the respondent, the University of East London, entered an Agreement dated 21 July 2003 under which Dr Hinton took early retirement. The Agreement contained a broad settlement clause (clause 9.1) and an express statement that the conditions for compromise agreements under the Employment Rights Act 1996 were satisfied (clause 10.1). Clause 11.1 recorded the employee's agreement to refrain from instituting or continuing proceedings before an employment tribunal in relation to claims comprised under clause 9.1.

Procedural history: The employment tribunal at Stratford held that the Agreement did not preclude Dr Hinton from bringing a complaint under section 47B of the Employment Rights Act 1996. The Employment Appeal Tribunal (HHJ Ansell) allowed the University's appeal. The matter came to the Court of Appeal by permission granted on 26 November 2004.

Nature of the claim / relief sought: The appellant sought to pursue an employment tribunal complaint under section 47B (public interest disclosure/detriment). The preliminary issue was whether the Agreement precluded him from bringing that claim.

Issues framed:

• Whether clause 9.1 and the Agreement as a whole, on contractual construction, covered the appellant's anticipated section 47B claim.
• Whether the Agreement complied with the statutory conditions in s203(3)(b) requiring that the agreement "relate to the particular proceedings" such that the compromise exception to the general rule of invalidity applied.
• The relevance and scope of Lunt v Merseyside TEC Ltd and other authorities and the proper construction of "relate to" in s203(3)(b).

Court’s reasoning: The Court applied contractual interpretation principles and considered the legislative policy of s203: protection of employees from giving up tribunal rights except where safeguards exist, while allowing valid compromises to facilitate settlement. On contract, the Agreement was sufficiently wide to cover the section 47B claim. On the statutory point the Court emphasised that, where no proceedings are in existence and the compromise purports to preclude anticipated proceedings, s203(3)(b) requires particularity: the agreement must relate to the particular proceedings in a way that gives the employee clear notice of what is being relinquished. A catch-all or rolled-up description is insufficient. The Court found Lunt helpful on some points but not authority for the particular-proceedings question. The Court concluded the Agreement did not satisfy s203(3)(b) and therefore did not bar the section 47B claim.

Practical guidance: The Court stated it is good practice for compromise agreements to insert brief factual and legal descriptions of the particular proceedings being compromised (or to identify the specific statutory provision or generic cause such as "unfair dismissal").

This was an appeal allowed. The Court of Appeal held that, although the settlement agreement was contractually wide enough to cover the appellant's section 47B complaint, it failed to comply with the statutory requirement in section 203(3)(b) that an agreement "relate to the particular proceedings" when no actual proceedings existed. Because the statutory safeguards were therefore not met the Agreement did not preclude the appellant from bringing his section 47B claim; the employment tribunal was correct and the Employment Appeal Tribunal ought to have dismissed the University's appeal.

Appeal from the Employment Appeal Tribunal (HHJ Ansell, judgment 22 October 2004) which had allowed the University's appeal against the Employment Tribunal at Stratford (extended reasons dated 18 May 2004). The Court of Appeal allowed the appellant's appeal ([2005] EWCA Civ 532).