Settled Law

A recent decision from the Employment Appeal Tribunal has shown the perils of settling claims with too wide terms, which left a Claimant unable to pursue a claim against a school which had allegedly not employed her because she had been a whistleblower. The Claimant worked at a school run by a Council and raised some safeguarding concerns and complained to OFSTED. She then left that school without making a Tribunal claim, and applied for a job at another school run by the same Council. She said that she got a negative reference from her former school due to whistleblowing and this led Council (the former and prospective employer) to negotiate, and a COT3 settlement was drawn up with ACAS, ending the claim. The settlement was worded 'broadly' to cover not only the claims from her employment but also 'events occurring after this agreement has been entered into…' before listing the types of complaints. All well and good, nothing unusual in that, the employer seeking to ensure finality.

The employee then applied for a job at another school run by the same Council and she didn't get the job. She claimed that it was due to her original whistleblowing that she didn't get the job. However, the Employment Tribunal struck out her case on the basis that the COT3 settlement with ACAS covered these claims as well (even though she hadn't even applied for the other job by then). This meant that the Council effectively got a 'buy one, get one free' settlement from this agreement, and it could in theory forever refuse to employ the Claimant even if the reason for that had been the original whistleblowing, almost like unlimited free drinks in the last-chance saloon.

As always, the key to this case was to looking at the wording of the agreement to see what the intention of the parties was when they made the agreement. It's a useful reminder to employers that a well-drafted settlement agreement or COT3 can protect against not only current claims but also future claims, and a warning to employees to be cautious about accepting settlements when there might be future claims particularly from new job applications to a large employer, which might be the only realistic option in some occupations. Generally this will be useful for Councils, the NHS and large employers where staff may come and go across their careers and seek work at other locations after an unhappy time at one location.

The case is Darlington v London Borough of Islington[2026] EAT 11.

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