THE INDUSTRIAL TRIBUNALS

CASE REF:	490/06

CLAIMANT:			John Crilly

RESPONDENT:		Silentnight Ireland Limited

DECISION ON A PRE-HEARING REVIEW
The decision of the tribunal is that a valid compromise agreement was not concluded between the parties.

Constitution of Tribunal:
Chairman (sitting alone):		Mr W Palmer

Appearances:
The claimant appeared in person and represented himself.
The respondent:	At the hearing on 16 February 2007, initially by Mr Dunlop, Barrister-at-Law, instructed by Ms Rooney, Solicitor, of Carson McDowell, Solicitors, and then by Ms Rooney, Solicitor, and at the hearing on 5 March 2007 by Mr Dunlop, Barrister-at-Law, instructed by Ms Rooney, Solicitor.

The issue

1.	The issue for decision is:-

“Whether a valid compromise agreement was concluded between the parties.”

The evidence

2.	I had before me, inter alia, a copy of an agreement that the parties accepted was the one to be considered and also three letters, namely, one, dated 5 October 2006, from the claimant’s former solicitors to the Office of the Industrial Tribunals, one, dated 19 February 2006, from the respondent’s solicitors to the claimant’s former solicitors and their reply, dated 23 February 2007.  The claimant gave oral evidence.  No oral evidence was given on behalf of the respondent.

Submissions

3.	Submissions were made by Mr Dunlop on both the issue and on costs.  I have taken these into account.  No submissions were made by the claimant.

The law with regard to compromise agreement

4.	The general rule regarding compromise agreements is contained in Article 245(1) of the Employment Rights (Northern Ireland) Order 1996 (the Order), which, insofar as relevant for these proceedings, provides that any provisions in a compromise agreement is void insofar as it purports to exclude or limit the operation of any provision of the Order or to preclude a person from bringing any proceedings under the Order before the industrial tribunal.  However, Article 245(2)(f)(i) of the Order provides that the general rule does not apply “to any agreement to refrain from instituting or continuing any proceedings within the following provisions of Article 20(1) of the Industrial Tribunals (Northern Ireland) Order 1996 (cases where conciliation available) –

(i)	sub-paragraph (c) (proceedings under this Order);

(ii)	…;

(iii)	…;

if the conditions regulating compromise agreements under this Order are satisfied in relation to the agreement …”.

Included in Article 20(1)(c), at (ix), of the Industrial Tribunals (Northern Ireland) Order 1996 is ‘unfair dismissal’.  Therefore, the general rule does not apply to a compromise agreement to settle an unfair dismissal claim.  There are, however, certain conditions that must be satisfied in compromise agreements in order to exclude that general rule.  These conditions are set out in Article 245(3) of the Order, which provides:-

“(3)	For the purposes of paragraph (2)(f) the conditions regarding compromise agreements under this Order are that –

(a)	the agreement must be in writing,

(b)	the agreement must relate to the particular proceedings,

(c)	the employee or worker must have received advice from a relevant independent adviser as to the terms and effect of the proposed agreement and, in particular, its effect on his ability to pursue his rights before an industrial tribunal,

(d)	there must be in force, when the adviser give the advice, a contract of insurance, or an indemnity provided for members of a profession or professional body, covering the risk of a claim by the employee or worker in respect of loss arising in consequence of the advice,

(e)	the agreement must identify the adviser, and

(f)	the agreement must state that the conditions regulating compromise agreements under this Order are satisfied.”

In Hinton  v  University of East London [2005] EWCA Civ 532, Mummery LJ said, at (4) of paragraph 17, of the equivalent provision applicable in his jurisdiction, namely, England and Wales:-

“The employees’ safeguards are to be found in the statutory conditions regulating compromise agreements [the Northern Ireland equivalent are those set out immediately above].  They must be satisfied in relation to the agreement.  If they are not satisfied the exception does not apply and the agreement is void.  On general principles of statutory interpretation the conditions should be construed, so far as is possible, to promote the purpose for which they are imposed, that is to protect employees when agreeing to relinquish the right to bring proceedings under the [Order] in the employment tribunal.”

The facts

5.	The claimant lodged a complaint on 26 April 2006 alleging unfair dismissal (constructive).

6.	The respondent lodged a response on 11 June 2006;

7.	The case was listed for hearing for 13 September 2006.  The claimant was represented by a firm of solicitors (who no longer act for him) and counsel.

8.	By Order, signed on 17 October 2006, the hearing was adjourned pending implementation of a settlement agreed between the parties.

9.	The case was listed for hearing on 16 February 2007 to determine the issue of whether a valid compromise agreement had been concluded between the parties.  Ms Rooney, on the basis that, as she put it, as Mr Crilly had only that morning raised the query as to whether or not the alleged written compromise agreement reflects his instructions she was not in a position to deal with the document and sought an adjournment.  The claimant had no objection to an adjournment.  I agreed to adjourn until 5 March 2007.

10.	On 19 February 2007, shortly after the adjournment, the respondent’s solicitors wrote to the claimant’s former solicitors in the following terms:-

“Mr Crilly went on to say [at the hearing on 16 February 2007] that the settlement document did not reflect the settlement reached on the morning of 13th September.  Whilst he accepted some agreement had been reached that morning, he denied the settlement documentation, copy enclosed herein for your ease of reference, accurately recorded the terms agreed.

In order to progress this matter, which has been listed for hearing on Monday 5th March, we would be grateful if you could confirm that the enclosed documentation is the written record of the agreement reached between the parties’ legal representatives at the tribunal on 13th September.”

11.	I note that the claimant’s former solicitors were asked to confirm that the documentation “is the written record of the agreement reached between the parties respective legal representatives on 13th September”.  (Emphasis added.)  When considering the claimant’s former solicitors’ response to the letter of 19 February 2007 I shall keep in mind the words underlined, namely, precisely what was requested be confirmed.

12.	In a reply, dated 23 February 2007, the claimant’s former solicitors wrote stating:-

“It is our understanding that this document does reflect the terms of the agreement reached on 13th September 2006.”

13.	Although the claimant’s former solicitors use the words ‘our understanding’, I accept that the agreement referred to, which is the one before me to decide the issue, is the one that was reached between the respective representatives.  I do not read the reply of 23 February 2007 as confirming anything more than that, keeping in mind what the claimant’s former solicitors were asked to confirm.  I also have in mind the letter, dated 5 October 2006.  This is a letter from the claimant’s former solicitors to the Office of the Industrial Tribunals.  In it is stated as follows:-

“We refer to the above matter which was listed for hearing on 13th September 2006 and which was adjourned for implementation of proposed settlement and we now write to advise that regrettably it has not been possible to reach settlement in this matter.”

14.	The claimant gave sworn evidence before me and was cross-examined.  The crux of his evidence, which he maintained during cross-examination, was that all he had agreed on the morning of the day set for the hearing of his case (13 September 2006) was the settlement figure, which he acknowledged was a compromise one, and that he had agreed nothing else.  He was not told anything about the agreement other than the settlement figure.  He does not dispute that the agreement before me had been reached between his then representatives and the respondent’s representatives, but maintained that he had no part in that agreement, other than agreeing the settlement figure.  Before me I have his evidence and his former solicitors’ letter that I interpret as agreeing that the agreement before me is the one reached between the respective representatives.  There is no evidence before me, other than from the claimant, on the matter of consultation with him about the agreement.  I accept the claimant’s evidence that the only matter that he agreed on 13 September 2006 was the amount to be paid to him by the respondent and nothing more.

15.	The agreement was forwarded to the claimant for signature.  He would not sign it.  He had believed, although not told it by anyone, that as the respondent was making a payment it was admitting liability.  Paragraph numbered 2 of the agreement states:-

“The said payment at paragraph 1 [the payment that the respondent had agreed to pay to the claimant] shall be made by the Respondent and accepted by the Applicant (sic) without any admission on the part of the Respondent.”

16.	This was unacceptable to the claimant as it was contrary to his belief (although he had not been told this) that on making a payment the respondent was admitting liability.  He did not agree to paragraph 2.  He also pointed out to me that the name of the claimant on the agreement before me is ‘James Crilly’.  The claimant’s name is John Crilly and this is the name on the proceedings.

17.	One of Mr Dunlop’s submissions (put here briefly), on behalf of the respondent, was that, in the circumstances, the claimant’s representative could bind his client and, therefore, the agreement was a valid one; any comeback the claimant had was against his former solicitors.  That is a proposition that might very well be accepted (I do not know), if it were not for the provisions contained in Article 245 of the Order.  My function, as I see it, is to determine, on the evidence, whether a valid compromise agreement was entered into.  I consider that this is to be resolved by reference to the statutory provisions contained in Article 245 of the Order, the purpose of which is, as stated by Mummery LJ in Hinton, to protect claimants when there is a settlement proposal that would lead to the relinquishment of a right to bring (and I would add ‘or to continue’) proceedings in the tribunals.  To fulfil that purpose I think that a claimant must know what he/she is agreeing to and that a claimant’s representative, in order that the relevant statutory provisions are complied with, cannot, in my view, agree a compromise agreement without his/her client first agreeing the details of what is proposed and being informed of their effect; if it were otherwise, it seems to me, that the provisions of Article 245 would be defeated.

18.	On the basis of the claimant’s evidence, and my acceptance of that evidence, I find that Article 245(3) of the Order was not complied with.  For example, the claimant did not receive advice on the effect of paragraphs 6 and 7 of the agreement.  Paragraph 6 states that the claimant acknowledges that he received independent legal advice from his former solicitors and counsel, “ … in relation to the terms and effect of this agreement and by signing his name to this agreement, or having the agreement being signed on his behalf by his solicitors, acknowledges that he understands, accepts and agrees to the contents of same voluntarily and in full understanding that he is releasing and compromising any and all claims and demands of every nature whatsoever against the respondent or associated companies of the respondent as are set out in this agreement”.  The claimant refused to sign the agreement when it was sent to him for signature and he did not have it signed on his behalf by his solicitors.  He has, therefore, never made the acknowledgements set out in that paragraph; nor did he receive advice on, or an explanation of, this wide clause.

19.	Paragraph 7 of the agreement states that the claimant acknowledges, “ … that the conditions regulating compromise agreements under the Employment Rights (NI) Order 1996 and/or Sex Discrimination Order 1976 and 1998 (sic) and/or Race Relations Order (NI) 1997 (sic) and/or Trade Union and Labour Relations Order (NI) 1995 and/or Disability Discrimination Act 1995 and/or the Fair Employment and Treatment (NI) Order 1998 are satisfied in relation to this agreement”.  The effect of this wide clause was not explained to him, nor was he advised on its contents.

20.	The claimant’s case was that he did not agree to the matters set out in the agreement (other than to the amount of money he was to receive) and they were not discussed with him.  The case he presented did not, in my view, require me to consider the agreement itself in light of all the statutory requirements contained in Article 245(3) of the Order.

Costs

21.	Mr Dunlop sought an order for costs in any event, namely, whether the claimant succeeded or not.

22.	I do not see any grounds upon which costs should be ordered against the claimant in respect of these proceedings.  I make no order as to costs against the claimant.

Listing

23.	The claimant’s claim under Case Reference No 490/06 will be listed for hearing.

Chairman:

Date and place of hearing:	16 February 2007 and 5 March 2007, Belfast

Date decision recorded in register and issued to parties: