Zinda v Ark School

The Court of Appeal refused a renewed application for permission to appeal against an Employment Tribunal decision that it had no jurisdiction to re-open claims which had been settled by a Compromise Agreement. The applicant relied on section 10 and Part 1 of the Unfair Contract Terms Act 1977 to challenge the Compromise Agreement and argued that an entire agreement clause (clause 9) and clause 12.1 rendered the settlement ineffective. The court held there was no arguable ground: the compromise agreement, made to satisfy section 203 of the Employment Rights Act 1996 and signed after advice from a permitted adviser, was valid; the Unfair Contract Terms Act 1977 did not provide a realistic basis to re-open the settled Employment Tribunal claims; and the Employment Tribunal correctly held it lacked jurisdiction to entertain the matter.

Background and parties:

• The claimant, Mr Zinda, was dismissed by Ark School in July 2008 and brought Employment Tribunal proceedings for unfair dismissal which were settled by a Compromise Agreement. The agreement included a confidentiality/non-detriment clause (clause 5A), an entire agreement clause (clause 9) which preserved liability for fraud, and clause 12.1 confirming the claimant had received advice from an Adviser defined as Mr Daryl Long of the National Union of Teachers. The termination payment was recorded as £20,000.
• After settlement the employer reported matters to the Independent Safeguarding Authority (allegations were about financial matters, not child molestation) and the claimant later issued various proceedings in the High Court, defamation and judicial review, and attempted to re-open the employment claims before the Employment Tribunal.

Procedural history:

• The High Court (Master Eastman) gave summary judgment for the employer on a contract claim on 11 November 2011; that decision was not appealed.
• The Employment Tribunal (Employment Judge Goodman) refused to accept the 2013 claim, holding it had no jurisdiction because the Compromise Agreement had settled the Tribunal claims.
• The claimant appealed to the Employment Appeal Tribunal; the appeal was dismissed by Supperstone J following a full hearing. Permission to appeal to the Court of Appeal was refused on paper by Lewison LJ and the claimant renewed that application orally before Bean LJ.

Issues framed by the court:

1. Whether the Compromise Agreement could be invalidated by reliance on section 10 or Part 1 of the Unfair Contract Terms Act 1977 so as to allow the Employment Tribunal claim to be re-opened.
2. Whether clause 9 (entire agreement clause) or clause 12.1 rendered the settlement unfair or otherwise ineffective.
3. Whether the Employment Tribunal was correct to conclude it lacked jurisdiction to entertain the reopened claim.

Court's reasoning and conclusions:

• The court observed that Part 1 of the Unfair Contract Terms Act 1977 is directed at consumer or standard terms situations and is not a general power to re-open contracts for unfairness; it considered the argument under section 10 of the 1977 Act to be without realistic prospect of success.
• The Compromise Agreement had been drawn up to satisfy section 203 of the Employment Rights Act 1996 and the Adviser who provided advice was of a kind permitted by that provision; accordingly the settlement was valid and effective to withdraw the Employment Tribunal claims.
• Any contention that the entire agreement clause made the compromise one-sided did not give rise to an arguable legal flaw in the Employment Judge's decision. If the UCTA argument had any merit, it should have been raised in the earlier High Court proceedings rather than in the Tribunal.
• Given these conclusions, the Employment Tribunal was correct to refuse jurisdiction and there was no arguable ground for appealing that decision to the Court of Appeal.

The court therefore refused the renewed application for permission to appeal.

The renewed application for permission to appeal was refused and the appeal dismissed. The court found no arguable ground: the Compromise Agreement was valid (it complied with section 203 of the Employment Rights Act 1996 and was signed after advice from a permitted adviser), the argument that Part 1 or section 10 of the Unfair Contract Terms Act 1977 invalidated the agreement was not realistically arguable, and the Employment Tribunal correctly concluded it had no jurisdiction to re-open claims already settled and determined in earlier proceedings.

Employment Tribunal (Employment Judge Sarah Goodman) refused to accept the 2013 claim for lack of jurisdiction. Appeal to the Employment Appeal Tribunal proceeded to a full hearing before Supperstone J who dismissed the appeal. Permission to appeal to the Court of Appeal was refused on paper by Lewison LJ; a renewed oral application for permission was refused by Bean LJ in the Court of Appeal on 28 July 2015. Earlier High Court proceedings before Master Eastman resulted in summary judgment for the defendant on a contract claim on 11 November 2011.