United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR R PIRANI (of Counsel) Instructed By: Mr L Pollitt Messrs Osborne Clarke Solicitors Apex Plaza Forbury Road Reading RG1 1AX
For the Respondent	IN PERSON


 


JUDGE LEVY; This Interlocutory Appeal raises a short point under section 203 of the Employment Rights Act 1996 ("the Section"). The Appellant was the employer of Mr A J Bartlett. Mr Bartlett had been in the Appellant's employ for a considerable amount of time when the Appellant formed the view that they no longer required his services. The parts of the Section material to this appeal are:

"(1) Any provision in an agreement (whether a contract of employment or not) is void in so far as it purports-

(a) to exclude or limit the operation of any provision of this Act, or

(b) to preclude a person from bringing any proceedings under this Act before an industrial tribunal.

(2) Subsection (1)-

(f) does not apply to any agreement to refrain from instituting or continuing before an industrial tribunal any proceedings within section 18(1)(d) (proceedings under this action where conciliation available) of the Industrial Tribunals Act 1996 if the conditions regulating compromise agreements under this Act are satisfied in relation to the agreement.

(3) For the purposes of subsection (2)(f) the conditions regulating compromise agreements under this Act are that-

(a) the agreement must be in writing,

(b) the agreement must relate to the particular complaint,

(c) the employee or worker must have received independent legal advice from a qualified lawyer as to the terms and effect of the proposed agreement and, in particular, its effect on his ability to pursue his rights before an industrial tribunal,

(d) there must be in force, when the adviser gives the advice, a policy of insurance covering the risk of a claim by the employee or worker in respect of loss arising in consequence of the advice,

(e) the agreement must identify the adviser, and

(f) the agreement must state that the conditions regulating compromise agreements under this Act are satisfied."

1. There were documents exchanged between the parties to see whether a compromise could be agreed under the Section. On 15 June, the Appellant sent to Mr Bartlett, proposals to follow the termination of his employment. They ran to some five pages and at the sixth page there was a document headed "Compromise Agreement" which required the signature of a solicitor certifying that certain advice had been given. On 17 August 1999, Mr Bartlett wrote to the employer saying inter alia that he had been advised by a solicitor that he should not enter into the Compromise Agreement until the employer was prepared to make a substantial payment to him. On 27 August, he wrote to the Appellant a letter in these terms:

"I am enclosing, duly signed, a copy of the Settlement Agreement, together with my letter headed 'Employment termination', formally resigning all offices held.

In the absence of a reply to date to my letter dated 17 August 1998, you should accept that no response is now sought.

May I confirm that I have taken advice on the terms and effect of the Settlement Agreement dated 15 June 1998."

He then gave the name of an advising solicitor and said:

"I will provide you with her signature to confirm the above, under separate cover."

The letter then contained these important paragraphs:

"Concerning the Company Car, I do not wish to have the title transferred to me, instead I would request the cash equivalent. Similarly, we had earlier agreed that the outplacement allowance may be paid directly to me.

I trust this matter may now be concluded."

The reference to the car was a reference to paragraph three of the Severance Agreement which dealt with the Company Car.

2. Shortly thereafter, we understand he was paid some money by the company, but on the last day when he was able to start proceedings before an Employment Tribunal he sent to the Tribunal an Originating Application complaining of unfair dismissal. The employer took the point that there had been a compromise entered into under the Section. A Chairman sitting alone heard argument as to whether there had in fact been an effective agreement under the Act. He sat on 23 March 1999. He gave summary reasons on 30 March 1999 and at the request of the Respondents provided Extended Reasons on 6 May 1999.
3. He found that there had not been a Compromise Agreement because there had been a failure under section 203(2)(f). We will read paragraph 15 of his Extended Reasons:

"Pursuant to Section 203(2)(f) Employment Rights Act 1996 the inability to exclude the jurisdiction of the Tribunal pursuant to Section 203(1) does not apply to an agreement in this respect if the conditions regulating compromise agreements under the Act are satisfied in relation to the agreement. Section 203(3) sets out for the purposes of sub-section (2)(f) the conditions regulating compromise agreements which are contained in sub-paragraphs (a) to (f). it is clear that the agreement satisfied all the requirements save for the views expressed regarding Section 203(3)(e). It states simply "the agreement must identify the adviser". Whilst I accept that the covering letter to the settlement agreement (sic) R22 does identify the solicitor who advised the applicant there is no reference to that solicitor within the body of the compromise agreement. Section 203(3) specifically refers to the agreement. It must be in writing. It must related to the particular complaint. It must state the conditions regulating compromise agreements. In my view because of failure to identify the adviser, the conditions regulating compromise agreements have not been satisfied in this one respect. In my opinion the covering letter cannot possibly be taken to form part of the separate document drawn up by the respondent being the compromise agreement. Looking at the plain language of the statute that the agreement must identify the adviser. This condition has not been met."

He then referred to a decision of the London South Employment Tribunal in Lambert v Croydon College (case number: 35472/96) and said:

"The issue is similar in that the finalised agreement did not refer to the advisor and the Tribunal refused to accept that letters written with a view to reaching a final agreement and subsequently the letters by which the two parts were exchanged and which identified the advisers were themselves part of the agreement. The Tribunal made the same policy observations that the conditions set out in Section 203(3) should be adhered to."

4. Mr Pirani who has appeared on behalf of the Appellant here (he did not appear below) has submitted that the Tribunal fell in error by refusing to look at the letter which accompanied the return of the agreement. He submitted both on the true construction of the Section and by applying normal rules of contract, it was quite sufficient for the purposes of the Section if there was sufficient evidence in the offer and the letter returning it. Looking at the two together, it was quite clear, he submitted, that there was an offer of acceptance identifying the adviser. He also submitted that the reference to the decision in the case of Lambert v Croydon College was unhelpful in that the decision of the Tribunal appeared not to be supported on appeal to this Tribunal - see Lambert v Croydon College EAT/1246/96.
5. It is apparent from reading the transcript of the EAT judgment in Lambert that there was a cross appeal which was dismissed which raised the issue of the validity of the signature of the advisor. There is, as far as we can gather, no authority from this Tribunal suggesting that the solicitor's signature must be on the document and that the agreement itself must only be in one document. In our judgment, under normal laws of contract, it is sufficient to find an offer of acceptance within two documents. However, that is not the end of this appeal because it is not apparent to us that the documents returned by Mr Bartlett did not accept the offer made by the Appellant but in the last two paragraphs of his letter made a counter-offer. We have seen no evidence that the effect of those paragraphs were ever considered by the Chairman.
6. In the circumstances we cannot support the judgment of the Chairman that because of the fault which he identified, there was no compromise agreement. The matter needs reconsidering by an Employment Tribunal. In the circumstances we allow this appeal and remit the matter back to an Employment Tribunal for the point to be looked at afresh by a different Chairman, or if appropriate, a different Tribunal. We will allow the appeal to that extent.