Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

An extremely important element of any compromise agreement is the “all claims” clause (also known as the “waiver of claims” clause). This clause is an attempt by the employer to limit or exclude its liability relating to future claims that an employee may have – either currently or in the future. In this article we’ll take a look at:

  • The purpose of a compromise agreement;
  • Why it is necessary to specifically exclude all claims;
  • The consequences of not excluding all claims; and
  • Which claims are excluded from the “all claims” ambit

The purpose of compromise agreements

Employees (and workers, a different category of persons working under a contract of service) are vested with certain rights at their employment by virtue of their contract of employment and statute. Under statute employees (and workers in some areas) have the right to, for example, not be discriminated against and not be unfairly dismissed. They can exercise these rights at any time (depending upon the type of claim and their employment status) – at the recruitment stage, during their employment, and at the termination of their contract of employment. Where there may be a potential claim, employers will want to limit or exclude the employee’s right to make such claims in return for consideration (a cash payment, normally).

Why it is necessary to exclude all claims

When the employer is trying to limit or exclude its liability, it must be careful to list out all potential claims that the worker or employee may have. This is primarily a result of the Court of Appeal’s judgment in Hinton v East London University[2005]. In Hinton the Court of Appeal held that compromise agreements must clearly identify all the statutory claims that are being settled in the compromise agreement. If there is a failure to do so then there is no binding waiver and the employee is entitled to bring a claim for any statutory claims not included in the compromise agreement.

If there is general wording in the compromise agreement (i.e. “all statutory claims are excluded”) then this will also not suffice. It would also be necessary not only to identify the statute that is being excluded (such as the “Equality Act 2010”) but also to include all potential claims under that Act, for example “sex discrimination” or “direct sex discrimination”. Further, if actual proceedings are ongoing against the employer, the compromise agreement should make specific reference to this.

An interesting further comment in Hinton is the suggestion that employment lawyers should not use standard template compromise agreements but that each compromise agreement should be tailored to the specific circumstances of the parties in any one instance.

Consequences of not excluding all claims

Should the employer fail to either exclude all the claims (i.e. through insufficient and general wording) the employee is free to pursue their employer for any and all relevant claims in their circumstances. If, however, the employer excludes every claim but (for some reason) the waiver of the right to claim unfair dismissal under s.94(1) Employment Rights Act 1996 is left out of the compromise agreement then the employee is entitled to pursue their employer for unfair dismissal (should, again, this be possible on the particular facts).

Which claims are excluded from the “all claims” ambit?

Generally, the employee’s right to claim for personal injury (except for personal injury claims that they don’t have knowledge of at the time of the compromise agreement) is preserved under the compromise agreement. However, the employer can (and may) attempt to exclude liability for personal injury. The employee’s right to claim for accrued pension rights should also be preserved under the compromise agreement.

About Chris Hadrill

Chris is a specialist employment lawyer at Redmans. He specialises in contentious and non-contentious employment matters, including breach of contract claims, compromise agreements and Employment Tribunal cases. He writes on employment law matters on a variety of websites, including Direct 2 Lawyers, Lawontheweb.co.uk, LegalVoice, the Justice Gap and his own blog. Contact Chris by emailing him at chadrill@redmans.co.uk

Tagged with →  

Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

Share →

One Response to Hinton v University of East London: Compromise agreements and “all claims” clauses

  1. Stephen Devereux says:

    The Hinton v east London Uni has become very relevant to my own situation. I signed a compromise agreement (COT3) that included the clause that would not support or encourage any other employee of the Respondent to bring a grievance or complaint against them. I objected but the ACAS negotiator told me there would be no deal without this clause. I signed it, thinking that, as an ex-employee, it would be extremely unlikely that i would be supporting anyone else.

    Later, however, an employee of the Respondent brought a claim for discrimination on the grounds of disability. As her union rep I had attended meetings in which her situation was discussed. The content of these meetings is disputed. The Claimant asked the ET to make a witness order, which she believed would protect me. However, the Respondent threatened to sue for the entire sum of the settlement plus costs if I testified or submitted a witness statement or even if I corresponded with the ET. I took legal advice at a considerable cost, and the Respondent conceded, eventually, that I could testify and produce a witness statement, but restated their rights in relation to the clause in the agreement. I am wondering whether I can reclaim the money I have had to spend to prove what was clearly the legal situation in the first place. As the Hinton case makes clear the ‘particular proceedings’ must be the subject of an agreement, not an unspecified claim by another employee.

Leave a Reply

Your email address will not be published. Required fields are marked *

 

Our awards

Request a callback

    Your first name (required)

    Your last name (required)

    Your email (required)

    Your telephone number (required)

    Brief details of your enquiry

    Testimonials

    4.80 Average

    292 Reviews

    Anonymous

    Exceeded my expectations. Very professional and proactive. I highly recommend them.

    Posted 1 week ago

    Anonymous

    The service provided to me by Redmans Solicitors was excellent and I would have no hesitation in recommending Chris. While I cannot get into the detail of the matter, it was very emotionally difficult for me and Chris was sensitive throughout and was clear that his motivation was arriving at a solution that helped me while I am unwell - and less about his own fee. His emotional intelligence was coupled with a very sharp and quick understanding of the complex facts of the matter and the legal arguments and he quickly formed a strong case working with me the whole way. Chris was particularly patient with me at what I found a stressful time, and I want to thank him personally for everything he did.

    Posted 1 week ago

    Anonymous

    A lovely, friendly and professional service. They advised me through my employment change. They where very responsive, keeping me updated and explaining everything in layman’s terms. No hidden charges. I would highly recommend them.

    Posted 2 weeks ago

    Philip H

    I was advised well and had a good experience using Redmans Solicitors.

    Posted 2 weeks ago

    Line v

    Good service and very helpful, informative

    Posted 2 weeks ago

    Katarzyna Z

    Very prompt replies, good rates and competent staff.

    Posted 2 weeks ago

    Sudhir S

    Professional in approach and give good advice all the time during my settlement agreement with the Company. Fee wise slightly expensive compare to the initial estimates.

    Posted 2 weeks ago

    Aaron H

    Very grateful to Mel who was brilliant kept me informed and was really helpful when I needed her

    Posted 2 weeks ago

    Alexia P

    The team at Redmans we're always professional and helpful throughout my case. The team were open to listening to me, understanding my situation and being clear about what they can support with.

    Posted 2 weeks ago

    Emma L

    So glad I chose Redmans to assist with my emplyment issue. From start to finish I received excellent service. Mel Chin had calm, methodical approach and she got me a far better result than I could have done on my own. Would not hesitate recommend far and wide.

    Posted 3 weeks ago

    Sam T

    I was extremely impressed with the support and advice that I received. The solicitors I worked with acted very quickly and were clear in their communications at every stage.

    Posted 3 weeks ago

    Anonymous

    I cannot thank Caroline enough for her empathetic help, advice and guidance in what was at times a very stressful situation. Always professional and available to answer any queries I had, I highly recommend Caroline and all the team at Redmans.

    Posted 3 weeks ago

    Robert M

    Chris Hadrill provided me with very efficient turn around of an employment offer from a US-based company. Chris reviewed the contract, identified key issues and offered sound/pragmatic advice and suggestions for improvement which I could then bring in non-legalese to my prospective employer. Employer accepted all the important changes Chris suggested and I accepted the job!! Very satisfied with the service.

    Posted 3 weeks ago

    Karen R

    Prompt, helpful and excellent service. Very professional and super quick. Very reasonable price for London. Definitely recommend and would use again.

    Posted 3 weeks ago

    Anonymous

    Excellent service from Redmans, I would not hesitate to recommend this firm of solicitors. Thank you very much to the team, and especially Chris and Mel!

    Posted 4 weeks ago

    Siriana B

    Thorough, efficient, and always available to answer my queries. It was a pleasure to deal with.Thanks

    Posted 1 month ago

    Anonymous

    Excellent speedy service

    Posted 1 month ago

    Robert

    Excellent service, very professional. would definitely use again.

    Posted 1 month ago

    Mary B

    I was very happy with the work Chris did for me. I believe with his help I secured a more favourable outcome both financially and in terms of clauses contained in the legal agreement I ultimately signed. I had utmost trust and confidence in the advice Chris provided throughout. Chris kept me informed at every stage and I found him very efficient at bringing matters to a conclusion without unnecessary delay.

    Posted 1 month ago

    Mark M

    I found Redmans very easy to work with. Mel was very responsive, her advice led to an improved settlement. . Recommended.!

    Posted 1 month ago

    Anonymous

    Fantastic service. I would recommend Redmans to anyone who needed a Solicitor. The communication was second to none and consistent clear guidance was given.

    Posted 1 month ago