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In the case of Glasgow City Council v Dahhan UKEATS/0024/15/JW the Employment Appeal Tribunal found that the Employment Tribunal does has jurisdiction to set aside a settlement agreement on the ground that it is invalid because a party to the agreement did not have sufficient mental capacity at the time the agreement was concluded.

The claimant in the case, Mr Dahhan, brought claims for direct discrimination, harassment, and victimization on the grounds of race against his employer, Glasgow City Council. On 20 June 2014 the Employment Tribunal was advised that the parties had settled the matter and that Mr Dahhan wished for his claims to be withdrawn and dismissed. The Employment Tribunal therefore dismissed the claims in a judgment dated 24 June 2014. Despite this, on 9 July 2014 Mr Dahhan wrote to the Employment Tribunal stating that he had not had mental capacity to instruct his solicitor and make decisions at the time that the settlement agreement had been agreed, and therefore wished to apply for a reconsideration of the judgment dated 24 June 2014.

Glasgow City Council objected to Mr Dahhan’s application for reconsideration and a preliminary hearing was held to consider whether the Employment Tribunal had jurisdiction to set aside the settlement agreement. The Employment Tribunal decided that it did have jurisdiction to set aside the agreement and Glasgow City Council appealed this decision to the Employment Appeal Tribunal.

The Employment Appeal Tribunal dismissed Glasgow City Council’s appeal, noting that under the relevant statute (sections 203 of the Employment Rights Act 1996 and sections 144 to 147 of the Equality Act 2010) a settlement agreement must be valid in both substance and form in order to prevent the Employment Tribunal from hearing an otherwise-valid claim. The Employment Appeal Tribunal referred to its decision in Industrious Ltd v Horizon Recruitment Ltd and anor (which is analysed by Chris Hadrill in this article) as support for its decision that the Tribunal does have the power to set aside a settlement agreement and that this power is conferred on it by the statutory requirement for the Tribunal to determine a settlement agreement’s validity.

Chris Hadrill, a specialist employment solicitor at Redmans, commented on the case: “Settlement agreements have to fulfil certain statutory requirements in order to be valid and to bind the Employment Tribunal – one of these statutory requirements is that the agreement be valid: as addressed in this article, a party can argue that a settlement agreement is invalid if, for example, a party did not have mental capacity at the time of the agreement, if there was undue influence or duress, or if a party was induced to enter into the agreement by fraudulent representation.”

The transcript of the judgment in Glasgow City Council v Dahhan UKEATS/0024/15/JW can be found here.

About

Redmans Employment Team deal with employment matters for both employers and employees, including drafting employment contracts and policies, advising employers and employees on compromise agreements, handling day-to-day HR issues, advising on restructures, and handling Employment Tribunal cases for both employers and employees Call 020 3397 3603 to speak to one of the members of our employment team or email us on enquiries@redmans.co.uk. Redmans have offices in Richmond, Chiswick, Hammersmith, Fulham, Kingston, Wimbledon, Ealing, Kings Cross and Marylebone (meetings strictly by appointment only).

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    Nigel A

    Chris Hadrill is hugely impressive - the right blend of assured calm and savvy professionalism. I've already recommended him to friends and family.

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    Overall I am satisfied with the performance from Redmans. The reason I have given 4 stars is that I had quite a lot difficulty in contacting the representative which was initially nominated for me. However, when I contacted Chris instead, he was excellent over the phone and secured a great outcome in short order. I would recommend Redmans Solicitors.

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    Chris and his team were excellent. They provided sound advice and consultation that resulted in more cash than was offered. Would definitely recommend.

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    I would like to take this opportunity to thank Mel Chin, for all her support during my settlement process. Where she provided a professional service and was understanding. I would confidently recommend Redmans Solicitors to my friends and family. Thank you and wishing you all a Merry Christmas.

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    I don’t normally write reviews, but thought it was time on this occasion. Just wanted to say that I highly recommend Redmans - especially Rana Tandon, who helped me navigate around my employment contract. Rana was meticulous and thorough and all over my needs. Would I use Redmans again ? ..absolutely

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    Anonymous

    Good service, but they could have been quicker in their responses to me. I also felt they could have made it clear at one crucial point that what I was proposing - and what I ultimately ended up doing - was counterproductive. (Had they made the rules around TOIL payments clear to me, this wouldn't have happened). Also, the amount I ended up paying was considerably higher than their original estimate. Still, satisfied with the service I received.

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    Anonymous

    Redmans assisted with a settlement agreement, providing a timely and professional service. Caroline articulates perfectly and was fantastic.

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