In a recent decision of the Workplace Relations Commission (“WRC”) in Brendan Flanagan v Ulster Bank Ireland DAC (ADJ-00052192), the Complainant claimed that his redundancy was not genuine and was based on him having made a protected disclosure. The Respondent argued that the Complainant signed a settlement agreement which confirmed that the enhanced redundancy payment made to him was in full and final settlement of all claims which he may have against the Respondent.
Facts: The Complainant’s employment commenced with the Respondent on 10th June 2008 and was terminated by reason of redundancy on 31st January 2024.
On 19th February 2021, the Respondent announced a phased withdrawal of all its banking activity and associated services from the Republic of Ireland. In June 2021, the Respondent and the Financial Services Union (the “FSU”) agreed a collective agreement for its withdrawal from the Republic of Ireland (the “Collective Agreement”).
On 24th May 2023, the Complainant, along with 800 other colleagues, was put at risk of redundancy. Of those 801 employees, 438 employees were made redundant in 2023 and 162 (including the Complainant) were made redundant in the first half of 2024.
On 12th October 2023, the Complainant was given formal notice of redundancy and was offered a settlement amount as per the terms of the Collective Agreement (a total lump sum of €145,543).
On 31st October 2023 the Complainant returned the Settlement Agreement signed and witnessed in which he accepted the terms were in full and final settlement of all claims, rights of action and demands in connection with his employment with the Respondent. The Respondent transferred the lump sum to the Complainant on 16th February 2024.
The Complainant argued that he signed the Settlement Agreement under duress. He claimed that his daughter was very ill at the time. The Complainant also stated that the Respondent never informed him to get legal advice on the Agreement before signing it. The Complainant alleged that he signed the Agreement as he felt that he had no other option.
However, the Complainant never informed the Respondent about his daughter’s illness, and he attended work throughout this period. The Complainant never sought additional time to consider the Agreement.
The Complainant admitted that he is a prudent person and that he was used to dealing with legal contracts and agreements as part of his job. In cross-examination he confirmed that he understood every clause in the Agreement and that it was in full and final settlement of all his claims. He also confirmed that he had read the entire agreement before signing it, including the clause which referred to him acknowledging that he had opportunity to get legal advice in advance of signing the Agreement.
The Complainant stated that if he did not sign the Agreement that the only alternative was statutory redundancy payment which he felt was untenable.
Decision: The WRC Adjudicator, Marie Flynn, relied on the decisions of Hurley v Royal Yacht Club [1997] ELR 225 and Sunday Newspapers Ltd v Stephen Kinsella and Luke Bradley [2008] 19 E.L.R. 53 in respect of employees being able to waive their statutory rights through an agreement by way of informed consent.
The Adjudicator stated that the Complainant, as a banker and having experience in the mortgage area, was familiar with legal agreements. While she acknowledged that the Respondent should have informed the Complainant to seek legal advice before he signed the Agreement, she was satisfied that the reference to having had an opportunity to seek legal advice in the Agreement was sufficient for the Complainant, particularly with his familiarity with legal agreements. The Adjudicator held that the Complainant was aware of the consequences of signing the Agreement.
The Adjudicator held that while he may have been under stress at the time of signing the Agreement due to his daughter’s health, he never informed the Respondent, and he was well enough to attend work during that period.
It was also held that the Complainant did have an alternative to signing the Settlement Agreement and that was to not sign it and just receive his statutory redundancy payment only.
The Adjudicator also pointed out that the Complainant was given four weeks to sign the Agreement.
Therefore, the Adjudicator found that the Settlement Agreement was in full and final settlement of all of the Complainant’s claims and that she had no jurisdiction to hear any of the Complainant’s claims.
Takeaway for Employers: While the Settlement Agreement in this case was upheld without having advised the Complainant to get legal advice, the fact that the terms of the Agreement had been pre-negotiated with the trade union may have impacted on this decision. It is always advisable to ensure that an employee is informed in writing to get legal advice in advance of signing any settlement agreement and also to give the employee ample time to consider the agreement before signing it. The four-week period in this case was able to contradict the argument of signing it under duress. There is no point in having a settlement agreement signed unless it is enforceable.
Link: https://www.workplacerelations.ie/en/cases/2024/september/adj-00052192.html
Author – Anne O’Connell
31st October 2024
Anne O’Connell
Solicitors
19-22 Lower Baggot Street
Dublin 2.
If you found this article useful you might like our employment law newsletter. We write monthly articles, like this, covering interesting cases, decisions, news and developments in Ireland.