Adrian Arvunescu v Quick Release (Automotive) Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewis,Lady Justice Elisabeth Laing,Lord Justice Warby |
| Judgment Date | 06 December 2022 |
| Neutral Citation | [2022] EWCA Civ 1600 |
| Docket Number | Case No: CA-2021-000207 |
| Court | Court of Appeal (Civil Division) |
[2022] EWCA Civ 1600
Lord Justice Lewis
Lady Justice Elisabeth Laing
and
Lord Justice Warby
Case No: CA-2021-000207
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL
MR MICHAEL FORD Q.C.
SITTING AS A DEPUTY HIGH COURT JUDGE
EA—2019000698-RN (formerly UKEAT/0770/19/RN)
Royal Courts of Justice
Strand, London, WC2A 2LL
The Appellant appeared in person
Jamie McCracken (instructed via direct access) for the Respondent
Hearing date: 28 November 2022
JUDGMENT APPROVED SUBJECT TO EDITORIAL CORRECTIONS
This judgment was handed down by the Judge remotely and release to The National Archives. The date and time for hand-down is deemed to be 10:30 on 6 December 2022.
INTRODUCTION
This appeal concerns the proper interpretation of a settlement agreement. The appellant, Adrian Arvunescu, was formerly employed by the respondent, Quick Release (Automotive) Ltd., between 4 May and 6 June in 2014. On the termination of his employment, the appellant brought proceedings alleging that he had been discriminated against on the grounds of race. On 1 March 2018, the appellant and the respondent entered into an agreement, referred to as a COT3 agreement, settling claims brought by the appellant.
In May 2018, the appellant brought a new claim against the respondent alleging victimisation. He alleged that he had applied in January 2018 for a post with a company (called QRG) based in Germany which was a wholly-owned subsidiary of the respondent. He was rejected for that post on 19 February 2018. He alleged that he had been victimised as he was refused the post because he had previously brought a claim of race discrimination against the respondent. He alleged that the respondent, through its close links with its subsidiary, had been responsible for him not being offered the post. This appeal concerns the question of whether, on a proper interpretation of the COT3 agreement, that claim was within the scope of the settlement agreement so had been settled by that agreement.
The COT3 agreement was confidential and neither party wished the tribunals below or this Court to see the full terms of the agreement. Both agreed that the material parts of the relevant clauses were adequately set out in the judgments below and this appeal could be dealt with on the basis of those extracts. They provide that:
“The claimant agrees that the payment set out in paragraph 1 is accepted in full and final settlement of all or any costs, claims, expenses or rights of action of any kind whatsoever, wheresoever and howsoever arising under common law, statute or otherwise (whether or not within the jurisdiction of the employment tribunal) which the claimant has or may have against the respondent or against any employee, agent or officer of the respondent arising directly or indirectly out of or in connection with the claimant's employment with the respondent, its termination or otherwise. This paragraph applies to a claim even though the claimant may be unaware at the date of this agreement of the circumstances which might give rise to it or the legal basis for such a claim.”
“For the avoidance of doubt, the settlement in paragraph 2 includes but is not limited to:
• the claimant's claim presently before the employment tribunal case number 2700958/2014;
• any other statutory claims whether under the Employment Rights Act 1996, the Working Time Regulations 1999, the Equality Act 2010, the Employment Relations Act 1999, the Employment Relations Act 1999 [ sic] or otherwise;
• any claims arising under any EU directive or any other legislation (whether originating in the UK, EU or elsewhere) applicable in the UK; and
• any claim for any payment in lieu of notice, expenses, holiday pay or any other employee benefits or remuneration accrued during the period of the claimant's employment by the respondent.”
THE PROCEEDINGS BELOW
At a preliminary hearing, the employment tribunal, employment judge Wyeth, held that the claim in the present case fell within the scope of the COT3 agreement and had been settled by the parties and so could not be the subject of proceedings. The employment tribunal considered that, on any objective interpretation of its wording, the COT3 agreement was unequivocal and applied in full and final settlement of all or any claim or right of action arising directly or indirectly out of or in connection with the appellant's employment. Further, the employment tribunal struck out the claim of victimisation in relation to the refusal of the post by the German company in 2018 as it considered that the claim had no reasonable prospect of success.
On appeal, the Employment Appeal Tribunal (“EAT”), Mr Michael Ford KC, sitting as a deputy judge of the High Court, analysed the claim in the following way. The allegation was that the respondent knowingly helped the German company to do an act of victimisation, by refusing the appellant the post in 2018, because the appellant had earlier brought proceedings against the respondent. That was an allegation of a breach of section 112 of the Equality Act 2010 (“the 2010 Act”). The EAT allowed an appeal against the finding that there was no reasonable prospect of that claim succeeding. The EAT, however, upheld the finding that the claim fell within the scope of the COT3 agreement and so had been settled and could not form the subject matter of proceedings in the employment tribunal.
The reasoning of the EAT was as follows. The role of the tribunal was to ascertain the meaning which the document would convey to a reasonable person having all the background knowledge reasonably available to the parties. The central question in the present case was whether the claim, properly analysed as a claim under section 112 of the 2010 Act, was one “arising directly or indirectly out of or in connection with the claimant's employment with the respondent, its termination or otherwise”. The EAT summarised the contentions of the parties at paragraph 56. Counsel for the appellant submitted that, while the COT3 agreement might cover direct post-employment victimisation by the former employer (the respondent), it did not cover a claim where the respondent had merely helped a third party victimise the appellant. That claim, it was submitted, did not arise directly or indirectly out of the appellant's employment with the respondent but rather out of prospective employment with a third company. Counsel for the respondent submitted that the agreement was intended to achieve what he described as “a clean break” between the respondent and the appellant settling all potential claims.
The EAT observed that the relevant clause in the COT3 agreement was not the best drafted. There were errors in the cross-references to other paragraphs in the agreement. The meaning of the phrase “or otherwise” was opaque and did not fit in as a matter of syntax. The EAT also considered that there might be some doubt about what was meant by a claim “arising … indirectly out of employment”. The EAT, however, found that the COT3 agreement did embrace the claim that the respondent had acted contrary to section 112 of the 2010 Act. The core reasoning is in paragraph 63 to 67 which are as follows:
“63. In my judgment, as a matter of fact the claimant's specific claim under section 112 did involve an indirect link or connection with the claimant's employment. The claim he brought was connected with his previous complaint of race discrimination, which was about his treatment while an employee of the respondent, and which gave rise to the protected act necessary for such a claim to be brought at all. I do not consider it is very far from Mr Young's example of the failure of an employer to provide a reference to a former employee because of a protected act, even if such a claim would be brought under section 108 rather than section 112. Such a claim would be said to arise “directly or indirectly out of or in connection with” employment for the purpose of the COT3. I consider a similar analysis applies here because, on the claimant's case, the respondent helped QRG to victimise him because of his complaint that he had been discriminated against while employed by the respondent.
64. I do not consider the fact that QRG is a separate legal person, and no cause of action arose until it refused to offer the claimant employment, is sufficient to detract from the width of the wording of the clause. In my judgment, the actual claim arose indirectly out of and in connection with the claimant's employment because one of the necessary factual ingredients of his succeeding in a claim under section 112 was the protected act based on his treatment while he was employed by the respondent. Such a connection with previous employment may not be a necessary legal ingredient of all claims under section 112; but it was an essential factual element of the particular claim under section 112 advanced here.
65. For completeness, nor do I consider that paragraph 11 of the EAT ruling in Howard assists the claimant. The issue in Howard was whether a COT3 agreement, signed in 1998 when Mrs Howard's employment was terminated, covered a claim based on victimisation when she asked to work for the respondent in 2000. I do not consider at paragraph 11 the EAT was making any general statement about whether her later claim arose out of her employment. It was addressing a different issue of whether the clause in that case, which applied to claims which the claimant “has or may have against the respondent”, was apt to embrace claims made after the date of the COT3 form. The EAT held that the wording of that expression only covered existing, and not future, claims (see paragraph 9). Its analysis at paragraph 11 was, in my view, only directed to addressing whether or...
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