And you thought employment law was easy...

Janet Gaymer explains what two recent judgments mean for employers who are anxious to avoid employment tribunals

Although employers continue to wish to settle employee claims to avoid tribunals, this is becoming far less straightforward as two recent cases show.

The first concerned a number of former employees of the collapsed banking organisation, BCCI, who in July 1990 had signed compromise agreements after an interview with an ACAS conciliation officer. The terms covered claims in relation to redundancy and there was a general waiver of other claims. An additional payment of one months salary was made to each of the employees. The agreements were made in full and final settlement of ... any claims, rights or applications of whatsoever nature that the applicant has or may have or has made or could make in or to the [employment] tribunal except the applicants rights under the respondents pension scheme. On the face of it they dealt with all claims past, present and future.

However, after the agreements were signed the Court of Appeal and then the House of Lords held that this wording did not stop the employees from claiming so-called stigma damages arising from the collapse of the bank and their dismissal. Their lordships concluded that the parties had not intended to waive claims which they could never have contemplated in the first place.

So where does this leave settlement agreements? Can an employer and an employee agree to waive future claims? The answer is yes but only after some detailed legal drafting. The safe course is to recite all actual or potential claims in such agreements which is hardly what hard-pressed HR professionals will wish to do.

Employment tribunal regulations are themselves becoming increasingly complicated. Anyone who represents a party at a tribunal should read the new Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001.

They are due to come into force in July and include new powers to make an award of costs against representatives of parties in tribunals. Tribunals can make such awards either against a party or their representative if the proceedings have been conducted vexatiously, abusively, disruptively or otherwise unreasonably or the bringing or conducting the proceedings by a party has been misconceived. A claim is misconceived if it has no reasonable prospect of success. There is no definition of representative and so those who appear in tribunals on behalf of others should be very clear about the capacity in which they are acting.

The emphasis on the notion of justice is an increasing theme in procedures following the introduction of the Human Rights Act 1998. This act incorporates Article 6 of the European Convention of Human Rights which guarantees the right to a fair trial. The first judgment on the effect of the act in the employment field has now been delivered by the Employment Appeal Tribunal.

In the case of De Keyser vs Wilson, the employee, Mrs Wilson, resigned and claimed constructive dismissal because she was suffering from stress caused by ill-treatment at the hands of her employer. She agreed to an assessment of her health, the cost of which was to be borne by the employer.

The letter of instruction sent to the appointed occupational health specialist contained reference to the stresses in Wilsons private life and commented on her employers opinion of her credibility. The stresses related to the death of a brother in unfortunate circumstances and press cuttings were produced of a custody case for her child, an alleged adulterous affair and the conviction of a man alleged to be her lover.

The tribunal struck out the employers defence for scandalous conduct of the proceedings in breach of the Human Rights Act. The writing of the letter was judged to be scandalous and there were things in it which were abusive.

The Employment Appeal Tribunal rejected the approach. The letter was written before the Human Rights Act came into force. The tribunal noted that the right to a fair trial might conflict with a right to have a private life. Wilson had started the proceedings and she couldnt expect her opponents not to attempt to refute her claim that her stress was work-related. This may mean therefore that employers will be able to avoid Human Rights arguments on the grounds of privacy because proceedings have been commenced and by implication privacy abandoned.

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Janet Gaymer is senior partner at Simmons & Simmons