In brief

The Court of Appeal has confirmed that an Acas-negotiated COT3 settlement agreement covered an individual’s claim that his former employer had knowingly helped a subsidiary unlawfully victimise him when the subsidiary rejected his job application. This situation was covered by the COT3’s express terms settling claims that indirectly arose in connection with his employment.

In more detail

In Arvunescu v Quick Release (Automotive) Ltd, the claimant issued proceedings claiming race discrimination. The parties entered into an Acas-negotiated COT3 settlement agreement in March 2018. Its terms included claims that indirectly arose in connection with his employment. Prior to concluding the settlement, in February 2018, a wholly-owned German subsidiary of Quick Release (QR) rejected a job application from the claimant. Following the settlement, in May 2018, the claimant issued new proceedings against QR, essentially saying that it had engineered his rejection.

The tribunal, EAT and Court of Appeal have all concluded that this new claim was covered by the settlement, and therefore could not proceed. 

In the lower tribunals, there was a question as to whether this case involved an attempt to settle a future claim, which is sometimes a thorny issue, as seen in another recent case (see “United Kingdom: Settlement agreement did not cover an unknown, future age discrimination claim“). However, in the Court of Appeal, the case proceeded on the basis of the chronology described above, meaning that the alleged unlawful conduct had already occurred before the settlement.

The EAT and Court of Appeal agreed that the claim was properly described as one where QR knowingly helped its subsidiary to victimise the claimant. In other words, it ensured that the subsidiary rejected the claimant’s job application, because he had claimed race discrimination against QR. The court decided that this type of claim could be characterised as indirectly arising in connection with his employment, and therefore was within the scope of the settlement.

Most precedent settlement agreements do refer to claims that indirectly arise in connection with employment or its termination, but this decision serves as a reminder to check that this is the case.