Adrian Arvunescu v Quick Release (Automotive) Limited

A settlement agreement is construed objectively, by giving its words their natural and ordinary meaning in the context of the agreement, the parties’ relationship and the relevant background known to them. A clause covering claims arising indirectly in connection with employment may extend to a claim concerning later conduct involving a different prospective employer where the claim depends on a protected act arising from the claimant’s former employment. The later conduct and separate legal personality do not prevent the required connection. Difficult wording does not necessarily create ambiguity. The court must determine the agreement’s scope rather than import causation concepts from other legal contexts.

The appellant had formerly been employed by the respondent and had brought race-discrimination proceedings. The parties later entered into a COT3 agreement settling claims arising directly or indirectly out of or in connection with his employment, its termination or otherwise.

He subsequently alleged that the respondent had knowingly helped its German subsidiary victimise him by refusing him employment because he had brought the earlier proceedings. The employment tribunal held that the claim was settled and struck it out. The Employment Appeal Tribunal, in EA-2019-000698-RN (formerly UKEAT/0770/19/RN), upheld that conclusion, although it allowed an appeal against a separate finding that the claim had no reasonable prospect of success.

The appeal concerned whether the alleged section 112 claim was within the COT3’s scope, and the significance of Royal National Orthopaedic Hospital Trust v Howard.

1. Appeal dismissed. The claim under section 112 of the Equality Act 2010 was compromised by the COT3 agreement and was properly struck out.
2. The agreement was construed objectively. The relevant words covered any claim or right of action which the appellant might have against the respondent, arising directly or indirectly out of or in connection with his employment, its termination or otherwise. The agreement expressly included statutory claims under the Equality Act 2010.
3. The claim was indirectly connected with the former employment. The alleged victimisation depended on the respondent having helped its German subsidiary refuse employment because the appellant had previously brought race-discrimination proceedings concerning the termination of his employment. That protected act was a necessary factual element of the particular claim. The subsidiary’s separate legal personality and the fact that the refusal completed the cause of action did not displace the contractual wording.
4. Difficulty in interpreting or applying contractual wording did not by itself establish ambiguity. Causation concepts drawn from other contractual or tort contexts did not determine the meaning of the COT3.
5. Royal National Orthopaedic Hospital Trust v Howard concerned settlement of future claims arising from post-settlement conduct. It did not define the phrase arising indirectly in connection with employment. Here, the alleged conduct occurred before the settlement date, and the claim was an existing claim within the agreement.
6. The agreement’s context reinforced the conclusion that it was intended to settle existing employment-connected claims, whether known or unknown. Ancillary applications concerning costs or permission to appeal were to be notified in writing within 14 days.

• Court of Appeal (Civil Division) — The appeal from the Employment Appeal Tribunal was dismissed. The Court upheld the conclusion that the claim had been settled by the COT3 agreement.
• Employment Appeal Tribunal — The EAT upheld the finding that the claim fell within the COT3, while allowing the appeal against the separate finding that the claim had no reasonable prospect of success. Citation: EA-2019-000698-RN (formerly UKEAT/0770/19/RN).
• Employment Tribunal — The tribunal held that the claim was within the COT3 and struck it out.