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In Odu-Obi v Interserve FM Ltd & Anor [UKEAT/0206/13/RN] the Employment Appeal Tribunal overturned the ruling of an Employment Tribunal that the Claimant was not entitled to make any claim for compensation or relief arising out the circumstances of her employment because she had signed a compromise agreement waiving her right to do so before she instigated her Employment Tribunal claim. The EAT came to the conclusion that it would be fair to preclude her from relying on events which had occurred before the signing of the compromise agreement in respect of her claim but that she should be allowed to claim for matters which arose after the date of the compromise agreement.

Facts of Odu-Obi v Interserve FM Ltd & Anor

The Claimant, Ms Odu-Obi, contended that she had been subjected to racial abuse in May 2010. She issued a grievance to this effect on 18 May 2010 and submitted an Employment Tribunal claim on 4 August 2010.

On 18 February 2011 the parties agreed that they would compromise the claims and entered into a compromise agreement. Part of the terms of this compromise agreement (now known as a “settlement agreement”) was that Ms Odu-Obi would accept the payment of a sum of money in return for agreeing to settle her claim as well as “any other claims, howsoever arising, whether statutory, tortious or contractual which she has or may have against any and all of the Respondent’s […] officers or employees, whether arising out of the Claimant’s contract of employment with the First Respondent or otherwise, at the time of signing this agreement including (without limitation) any claims for: (a)….“.

Ms Odu-Obi remained at work after signing the agreement and her employment terminated on 23 November 2011, when she resigned. She subsequently raised a further Employment Tribunal claim which was based on the manner in which she was treated after she signed the settlement agreement on 9 March 2011 (the date it was signed). The Employment Tribunal claim that she made was for constructive dismissal, race discrimination, and disability discrimination, and some of the claims (paragraphs 1 to 19) were based on matters which had happened prior to 9 March 2011; the other claims (paragraphs 20 and after) dealt with matters arising after 9 March 2011.

Interserve FM Limited (“the Respondent”) sought to strike out  the claim on the basis that it contended that the effect of the settlement agreement was to preclude the Claimant from pursuing a claim in respect of matters which had arose before or since 9 March 2011.

A preliminary hearing took place on 15 May 2012 before Employment Judge Hyde. She concluded that the Claimant could not in a further claim rely on matters which had taken place up to 18 February 2011, but that the Claimant could rely on matters to form such a claim that had taken place after 18 February 2011. She directed that there should be an amended particulars of claim lodged which eliminated paragraphs 1 to 19.

A particulars of claim was lodged, as directed, but paragraphs 17 to 19 were not eliminated. The Respondent complained that here had not been compliance with EJ Hyde’s order and a second preliminary hearing was held on 18 December 2012, again before EJ Hyde. EJ Hyde again ruled that Ms Odu-Obi was precluded from relying on incidents which took place prior to 9 March 2011 in in support of her current Employment Tribunal claim due to the construction of the settlement agreement.

In February 2013 the Respondent filed amended grounds of resistance. Those amended grounds of resistance sought to argue that that the Claimant’s manager had raised concerns regarding her performance since 2007, arguing that she had underperformed and that she had been off work sick to such an extent that this may have been the reason why she had resigned. The Claimant’s solicitors complained, in response, that this argument was unfair, given that the Tribunal had ruled that the Claimant could not provide evidence in support of her claims regarding matters which took place prior to 9 March 2011 (and that she was therefore unable to respond to the allegations raised by the Respondent).

A further preliminary hearing was arranged to consider this issue and EJ Hyde ruled that “the Claimant cannot criticise the Respondent’s actions. The same does not apply to the Respondents.”

The Claimant appealed against that decision, arguing, essentially, that, as HHJ Langstaff put it, it was unfair of EJ Hyde to make an order which effectively required the Claimant to litigate with one hand tied behind her back; there was an imbalance between the Respondent, who could refer to matters prior to 18 February 2011, and the Claimant, who could not (except where such matters were uncontroversial or did not criticize the Respondent).

The Employment Appeal Tribunal’s decision

HHJ Langstaff first concluded that, notwithstanding that an appeal against EJ Hyde’s first two judgments was prima-facie out of time, the third and final preliminary hearing in front of EJ Hyde had invited the parties to make arguments as to the legitimacy of her previous decisions with the prospect of her previous judgments being varied; HHJ Langstaff ruled that he was therefore entitled to consider the interpretation of the settlement agreement.

In respect of the ground(s) of appeal, HHJ Langstaff further determined that:

  1. The Claimant was not entitled to make any claim for compensation or relief arising out of or relying upon any matter which she might have complained of prior to 9 March 2011;
  2. She was entitled only to rely upon matters occurring prior to 9 March 2011 to the extent that such provided context to her current claim, if that was necessary and proportionate to do so; and
  3. That it was open to the Claimant to call evidence or cross-examine the Respondent’s contention that the real reason for its behaviour towards her was her performance and illness – if she were unable to do so, then she might be unable to present her case

Our solicitors’ comments on Odu-Obi v Interserve FM Ltd & Anor

Chris Hadrill, a specialist employment solicitor at Redmans, commented on the case: “The judgment of the Employment Appeal Tribunal is obviously particular to the circumstances of the individual case and the facts are quite unusual in and of themselves – normally settlement agreements give rise to the termination of employment, meaning that it’s unlikely that further claims could or would be brought by the departed employee. However, the broad rule in this case is that the Tribunal should ensure that the parties are placed on as equal a footing as possible in bringing and defending claims.”

The judgment of the Employment Appeal Tribunal can be found here.

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