COMPROMISE AGREEMENTS : EMPLOYMENT TRIBUNALS : JURISDICTION :
MISREPRESENTATION : VOID CONTRACTS : JURISDICTION TO CONSIDER VALIDITY OF COMPROMISE AGREEMENT : s.203(3) EMPLOYMENT RIGHTS ACT 1996 : s.203 EMPLOYMENT RIGHTS ACT 1996
Employment tribunals had jurisdiction to consider whether a compromise agreement could be avoided at common law before deciding if it constituted a valid agreement for the purposes of the Employment Rights Act 1996 s.203.
The appellant employer (X) appealed against an employment tribunal’s decision that it had jurisdiction to determine the enforceability of a compromise agreement. The first respondent company (H) had employed the second respondent employee (V) until her resignation. V claimed that she had agreed to resign in return for a monetary settlement prior to H’s transfer to X under the Transfer of Undertakings (Protection of Employment) Regulations. A compromise agreement was entered into between V, H and X under which she was to receive a total of £43,750. The agreement complied with the conditions set out in the Employment Rights Act 1996 s.203(3).
HELD: (1) The dicta in Hennessy v Craigmyle & Co (1985) ICR 879 EAT was powerful support for the approach of the employment judge, which was that an employment tribunal was entitled to consider whether a compromise agreement could be avoided before deciding if it constituted a valid agreement for the purposes of s.203. In that case the court had recognised that contracting out provisions could be avoided on the grounds on which an agreement could be avoided at common law, and economic duress was an example of that. Misrepresentation was given as a further example in Greenfield v Robinson (EAT/811/95). The cases relied upon by X were not helpful. In Eden and Larkfield the compromise related to an appeal to the EAT, rather than to the employment tribunal, Eden and Larkfield distinguished, and Byrnell v British Telecommunications Plc Unreported November 4, 2004 EAT not followed. Further, in Larkfield the EAT had not been referred to the judgment of Popplewell J in Hennessy.
INDUSTRIOUS LTD v (1) HORIZON RECRUITMENT LTD (In Liquidation) (2) J