- Posted by Bernadette
- On August 23, 2011
- High Courts, Unfair Dismissals
Caruana v Fruit of the Loom  IEHC 130 (Judgement 30 March 2011)
The employee in this case had been made redundant and took an unfair dismissal claim. During the hearing of the claim before the EAT a settlement or compromise agreement was drafted, negotiated and signed by the representatives of both parties. At the time of the agreement the claimant had in fact four personal injury claims against the employer, three by letters sent by solicitors (one of which was out of time) and a fourth by issued court summons which had not been served on the employer. The agreement was intended to cover absolutely everything that might arise in terms of claims other than two personal injury claims ( one was out of time and one was unknown to the employer leaving two valid claims to be addressed – as far as the employer was aware). The central issue, to be determined in the first instance, was whether or not the claim for bullying and harassment, the subject of the instant case, was one of those two explicitly excluded from the agreement or if, as argued by the employer, it was included and the employee was therefore estopped from pursuing it.
The confusion (if such it was) began during the negotiations of the agreement drafted in connection with the EAT hearing. The employer’s representative drafted the agreement and it stated
“In full and final settlement of all claims of every nature, type and kind whatsoever and howsoever arising in respect of and from both my former employment and the termination thereof by reason of redundancy…. including my abovementioned two employment claims, both under statute and at common law, in all respects and for all purposes, with the exception of my two outstanding employer liability claims for personal injuries against [the defendant].”
The employee’s union representative, Mr. Reilly, asked Mr. Murphy, IBEC solicitor for the employer (now a member of the Labour Court), if there were personal injury claims and the HC found that Mr. Murphy replied that there were two and that he identified them by date but not by detail. When the union representative said to the employee “I have been told by Mr. Murphy that there are two outstanding claims: I presume you know what they are” the employee replied “Yes I do, there’s the bullying and harassment complaint and there’s the complaint about a fork-lift accident”. The Judge found, at the moment he responded, that the employee knew the respondent did not know about the fourth claim and he also found that Mr. Reilly could not have known that the bullying and harassment claim was unknown to the employer and its representative. In his turn, Mr. Murphy could not have known that Mr. Reilly was acknowledging two claims that were not the same as the two he understood to exist.
The judge found that the employee knew when he said this that neither the employer nor its representative could have been aware of the bullying and harassment claim since they had never been served the papers in that regard. Therefore, he found that the employee’s response was “factually inaccurate and at the very best disingenuous and reckless”. The judge laid the responsibility for the misunderstanding firmly at the feet of the employee. The employee appeared to know his rights and this was described by the Judge in the following extracts: “Between August 1997 and December 2002, no less than 10 incidents involving alleged personal injury to the plaintiff were recorded in the defendant’s incident log. In addition, the plaintiff had successfully challenged three disciplinary decisions against him by the defendant before a Rights Commissioner.” “Though a general operative with the defendant the plaintiff was a SIPTU shop steward and the history of his employment and dealings with the defendant demonstrates that he was possessed of an alert and resourceful mind.”
The judge found that the employee was aware that the employer did not know about this fourth claim. He found that the two mentioned as being excluded were the two mentioned by date by Mr. Murphy to Mr. Reilly. He also found that Mr. Reilly could not have known that the employee’s response actually referred to a different claim. He found that it was the intention of the two representatives to include everything other than the two claims mentioned (which he had found to be the two mentioned by Mr. Murphy by date). He stated “Both men told the court that they were agreed on the 30th April, 2004, that so far as humanly possible every “I” should be dotted and every “T” crossed in the agreement because of the troubled and eventful history of the plaintiff’s employment with the defendant”.
Since the employee knew the respondent did not know about the fourth claim, and therefore knew the respondent could not have intended to exclude a claim it was unaware of, and because the agreement had been explained to the complainant who had time to consider it before signing it, the Judge found that the employee was therefore estopped from pursuing the instant claim. In other words the Judge found that the employee understood the ramifications of signing the agreement which incorporated his agreement to forego any rights to further claims in respect of his employment other than the two excluded claims.
What is particularly interesting is that conventional wisdom suggests that employers entering into compromise agreements should list each piece of legislation in accordance with which claims are to be foregone. This whole topic of compromise agreements was expertly covered by Adrian Twomey (www.advokat.ie) in his presentation “Termination & Compromise Agreements” at the CIPD conference on 28 March 2011. In the instant case however, the various pieces of legislation were not explicitly included (note that the agreement was drawn up ‘on the hoof’ as it were) and in fact such identification may not have been of huge assistance in respect of the particular facts of the case. However, the High Court (Mr. Justice Herbert) found that the agreement was sufficient in nature to indicate that the employee had agreed to forego all claims other than the two found to be excluded.
It seems the moral of the story is to be explicit with what is excluded as well as what is included!