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Court of Appeal dismisses victimisation claim – What can employers learn from this ruling?

A victimisation claim brought against an employer has been dismissed because of the precise wording in a Settlement Agreement.

Arvunescu v Quick Release Automotive Ltd (QRA) went to an Employment Tribunal (ET) an Employment Appeals Tribunal (EAT) and finally the Court of Appeal.

Mr Arvunescu had worked for QRA a month before his dismissal in June 2014. He then brought a race discrimination claim but this was settled in March 2018 via a ‘COT3’ agreement.

A COT3 agreement sets out the terms of a settlement agreement between an employer and employee. It forms part of the ACAS early conciliation process and is intended to resolve employment claims coming before the employment tribunal.

The agreement included the following words:

“The claimant agrees that the payment […] is accepted in full and final settlement of all or any costs, claims, expenses or rights of action of any kind whatsoever, wheresoever and howsoever arising under common law, statute or otherwise (whether or not within the jurisdiction of the employment tribunal) which the claimant has or may have against the respondent or against any employee, agent or officer of the respondent arising directly or indirectly out of or in connection with the claimant’s employment with the respondent, its termination or otherwise. This paragraph applies to a claim even though the claimant may be unaware at the date of this agreement of the circumstances which might give rise to it or the legal basis for such a claim.” 

Mr Arvunescu later brought another claim against QRA for victimisation in May 2018, alleging that the firm was responsible for his failure to get a job at a subsidiary of theirs.

The ET and the EAT held that this victimisation claim had been settled by the COT3 agreement. Mr Arvunescu then appealed.

The appeal was dismissed by the Court of Appeal which said Mr Arvunescu’s victimisation claim was clearly caught by the COT3 wording.

While the claim didn’t arise directly or indirectly ‘out of’ his employment at QRA, it nevertheless arose indirectly ‘in connection with’ it.  The claim was, therefore, compromised or settled by the COT3 agreement.

Amanda Hyam, a Senior Associate with Mander Hadley who specialises in dispute resolution and employment law, said: “Crucially, this case hinged on the small print within a COT3 Settlement Agreement and underlines how critical it is to ensure that all such Agreements are drawn up by a solicitor that specialises in this area of law.”

To help employers understand the key aspects of Settlement Agreements we have produced a free guide which is available to download here.

If you are considering ending an employment relationship in this way, our employment law experts are here to provide you with advice and will outline your options as an employer. To find out more, please get in touch now.

Amanda Hyam

Head of Dispute Resolution and Employment

I have specialised in Dispute Resolution, Civil Litigation and Employment law for more than 15 years. I understand how daunting the prospect of litigation can be and because of this I am always available to discuss concerns.