The Equality Act came into force under much fanfare last month combining the nine pieces of legislation that previously made up our anti-discrimination laws.
Amongst the changes this new legislation brings a considerable amount of attention has centred on the meaning of section 147 and the affect this has on the enforceability of compromise agreements used to settle claims under the Act.
To meet the requirements for a "qualifying compromise contract" a claimant must receive advice from an "independent adviser" about its terms and effect. The issue arises over what constitutes an "independent adviser".
Section 147(5) states that a claimant's representative, whether a lawyer or union representative, although appropriately qualified and insured, is not an independent adviser and therefore cannot advise on a compromise agreement so as to make the agreement a binding contract of compromise to exclude or terminate rights under the Equality Act 2010.
Lawyers have been debating this point since the implementation of the Act last month and the general consensus is that it is a drafting error. Prior to the Act coming into force, solicitors acting for the claimant had been able to advise on such agreements.
Case law has been used in the past to deal with drafting errors. Where wording of the statute is plain and unambiguous, the Courts are bound to construe them in their ordinary sense even if it leads to an absurd result or manifest injustice. It appears the wording in section 147 is plain and unambiguous. However, a reading of the explanatory notes for the Act show its effect is clearly not what the legislature intended.
In situations such as this there is case law which indicates that the Courts may be prepared to look at all the evidence, such as Parliamentary debates recorded in Hansard, to determine what the legislation was intended to do.
It is hoped that Parliament will resolve this issue shortly or the Courts will be required to make a declaration as to the meaning of the provision. It is understood the Government Equalities Office is considering publishing information on its website to clear this matter before long.
On the other hand, claimant solicitors may worry less about the provision on the basis that it is more of a problem for an employer if the compromise agreement does not fulfill the criteria to settle any claims under the Act once the agreed sum has been paid to the claimant.
In the meantime, the surest solution is for parties to conclude matters formally through ACAS's form COT3.
Submitted by Damian Brooks
