Blog
Preparing for changes to non-disclosure agreements from 1 October 2025
Andy Norris
In the recent case of Clifford v IBM United Kingdom Ltd. the English Employment Appeal Tribunal (EAT) has followed the decision of the Scottish Court of Session in Bathgate v Technip regarding the limits on what future statutory employment claims (in this case disability discrimination) can be settled by a settlement agreement.
The issue
It is a feature of most statutory employment law claims that they cannot be waived unless a number of closely defined conditions are satisfied, most commonly requiring a “qualifying settlement agreement”. In the Equality Act 2010 (section 147(3)) and the Employment Rights Act 1996 (section 203(3)), conditions for such a settlement agreement (“Waiver Conditions”) include that:
- the contract relates to the particular complaint;
- before entering into the contract, the person has received advice from an independent adviser (commonly a solicitor) about its terms and effect (including, in particular, its effect on the person’s ability to pursue the complaint before an employment tribunal); and
- the contract is in writing, identifies the adviser and confirms that the relevant conditions have been met.
The issue is therefore the extent to which it is possible to waive claims which may arise out of facts which occur in the future. What is the meaning of “the particular complaint” in this context?
Facts
Mr Clifford had been continuously absent from work as a result of ill-health from September 2008 and had not worked since then. In 2012 he pursued a Grievance relating to various matters including the failure to transfer him to IBM’s Disability Plan. This led to the parties entering into a settlement agreement pursuant to which IBM agreed that Mr Clifford would remain employed as an inactive employee, move to the Disability Plan and receive disability salary payments at a specified level (broadly 75% of his previous salary). The terms of the Plan indicated that an increase in these payments was discretionary.
Under the terms of the settlement agreement, Mr Clifford waived the right to bring various specified claims, including disability discrimination claims, whether or not they were or could be in the contemplation of the parties at the date of the agreement. It was an express term of the settlement agreement that Mr Clifford’s waiver of claims would not extend to: “Any claims which arise after the date of this Agreement and which: (i) are not connected to the matters set out in the Grievance or Appeal; or (ii) do not arise out of the Claimant’s transfer to the Plan.”
In October 2022, the Scottish EAT gave Judgment in the case of Bathgate v Technip UK Limited. This held that the words "the particular complaint" anticipated the existence of an actual complaint or circumstances where the grounds for a complaint existed and that they were not apt to describe a potential future complaint.
No doubt having seen this case, Mr Clifford brought Employment Tribunal proceedings later in 2022. He claimed, amongst other things that he had suffered disability discrimination because he had not had annual salary reviews in the same way as those employees who were able to carry out their contractual duties.
Decision
Unfortunately for Mr Clifford, prior to the conclusion of his Claim, the Scottish Court of Session heard an appeal against the Scottish EAT’s decision in Bathgate v Technip UK and held that, in principle, it can be possible to waive claims arising out of future events. The key question is whether the terms of the settlement agreement are sufficiently clear to cover the particular future claims.
Technically, decisions of the Scottish Court of Session are not binding on the English EAT. However, the rule is that the English EAT will ordinarily be expected to follow decisions of the Court of Session where the point confronting them is indistinguishable from what was decided there. This stems from the principle of “comity” that it would be undesirable for the same piece of legislation to mean one thing in England and Wales and something quite different in Scotland.
In Mr Clifford’s case, the English EAT considered the relevant cases very thoroughly in a Judgment running to 42 pages. They concluded that there is nothing in the statutory language of the Waiver Conditions that precludes the settlement of future claims provided appropriately clear language is employed.
The English EAT acknowledged that the purpose of the Waiver Conditions is to prevent an employer from being able to use a blanket waiver in relation to which an employee could sign away their rights without appreciating the significance of what they were doing. However, they considered that the wording signed by Mr Clifford was sufficiently clear. They accepted that, in general, the Waiver Conditions can be satisfied by the agreement identifying claims by a generic description (such as “unfair dismissal”) or by reference to the section of the statute giving rise to the claim.
Conclusions
In practice, many settlement agreements on termination of employment are entered into by employees on standard precedent terms which are presented to them on a “take it or leave it” basis and with limited contributions to legal fees. It is to be expected that employers will update their precedents to achieve as wide a waiver as possible.
In Mr Clifford’s case, the exclusion of future claims relating to his grievance and appeal (set out above) was reasonably expressed.
It is though possible to conceive of examples of employers seeking to rely on more generic wording relating to future discrimination claims, for instance in circumstances where an ex-employee alleges that an employment reference is negative and that was an act of discrimination relating to his prior employment. I anticipate that Clifford v IBM (UK) Ltd. will not be the last word on this issue but, as things stand, it is certainly a case which appears to favour employers more than employees and their advisers.
Further information
If you have any questions or concerns about the topics raised in this blog, please contact Nick Ralph in our Employment team.
About the author
Nick Ralph is a highly experienced employment lawyer with an exceptionally strong reputation in the City of London and beyond. Employment disputes can be very stressful for all concerned and Nick combines both empathy and toughness as necessary. He is a tenacious litigator and a tough negotiator with particular expertise in dealing with complex issues involving combinations of employment, partnership and related rights.
We welcome views and opinions about the issues raised in this blog. Should you require specific advice in relation to personal circumstances, please use the form on the contact page.
You may also be interested in:
Blog
Managing digital nomads: What UK employers need to know
Daniel Zona
Blog
The Employment Rights Bill Tracker
Georgia Roberts
Share insightLinkedIn X Facebook Email to a friend Print