QR v The GI Group Limited

An oral employment-related agreement may be enforceable despite not satisfying the formal requirements for a statutory settlement agreement. However, the statutory context may objectively show that the parties intended no binding agreement unless it was reduced to writing and the employee received independent legal advice.

Under rule 76(1)(a), the absence of reasonable prospects for procedural applications may be central evidence that their pursuit was unreasonable, although rule 76(1)(b) applies only to a claim or response. Where an employment tribunal considers means under rule 84, it must focus on the paying party’s own ability to pay. Third-party resources matter only insofar as they affect that ability. The tribunal must also give adequate reasons for the amount awarded.

The Claimant alleged that, during negotiations following a dispute about flexible working and a grievance, she and the Respondent made an oral agreement under which her employment would end and she would receive £40,000. The Employment Tribunal dismissed her contractual claim, finding that there were agreed elements but no complete and binding agreement.

Following a preliminary hearing, the Tribunal ordered the Claimant to pay £10,100 towards the Respondent’s costs. It relied on procedural applications made on her behalf, including applications to strike out the response, postpone the hearing and grant anonymity.

The Claimant appealed both decisions. The central issues were whether the Tribunal had confused statutory settlement formalities with common-law contract formation, and whether its costs decision applied the correct rules and gave sufficient reasons.

1. Appeal allowed in part. The appeal against dismissal of the breach of contract claim was dismissed. The appeal against the £10,100 costs award was allowed on the issues of means and quantum. The costs decision was remitted to the same Employment Judge.

2. The Tribunal did not treat compliance with section 203 of the Employment Rights Act 1996 as a necessary condition of an enforceable contract in all respects. An oral agreement could be enforceable at common law despite failing to satisfy that section. Read fairly as a whole, however, the Tribunal found that the parties understood that no final and binding agreement would arise unless it was written and the Claimant received legal advice. That finding was supported by unresolved terms, continued negotiations and the Claimant’s own understanding. The agreement was therefore incomplete or subject to a condition precedent, or the parties lacked an intention to create legal relations until those steps occurred.

3. Rule 76(1)(b) of the Tribunal Rules 2013 could not apply to procedural applications, because it concerns only a claim or response. Nevertheless, the lack of any reasonable prospect of success of the applications was centrally relevant to whether their pursuit was unreasonable conduct under rule 76(1)(a). On the particular facts, the Tribunal had not applied the wrong test and was entitled to make a costs order.

4. A representative is presumptively acting on the party’s behalf, though that presumption may be rebutted. A tribunal need investigate authority where there is potential cause for concern. The weakness of the applications did not itself require an inquiry here, given the Claimant’s presence, knowledge, participation and failure to dissociate herself from her representative.

5. The Tribunal erred in assessing the amount of costs. Having considered means, rule 84 required it to focus on the Claimant’s ability to pay, not simply the joint income of the Claimant and her husband. Its reasons also failed to explain how the applications, the schedule of costs and the relevant means produced the figure of £10,100.

• Employment Appeal Tribunal: Allowed grounds 5 and 6 concerning the amount of the costs order, overturned the £10,100 award and remitted costs to the same Employment Judge. Dismissed the appeal against the contractual decision and the remaining costs grounds: [2025] EAT 178.
• Employment Tribunal: Dismissed the Claimant’s breach of contract claim and subsequently ordered her to pay £10,100 towards the Respondent’s costs. Both judgments were sent on 1 July 2024.