Your rights: How binding is a settlement?

By JOHN HANNAN of Phillips Fox

Q. I had a situation a couple of years ago now where I had been employed for seven years as a temp, and when a full-time position came up I applied for it and did not get it.

I made a fuss and accused them of all sorts of things (which were true and based on legislation and policy), but was fobbed off and told that if I did not accept the redundancy money that they were offering, they would withdraw the offer.

I tried to defend my case knowing that what they were doing was illegal, but I could not afford a lawyer and in the end I signed a letter saying I accepted the redundancy money and would take no further action on the matter.

My question is, how binding is that signed letter? My life has deteriorated since I effectively lost my career, and I am now sorry that I accepted the amount they offered and didn't take legal action. Is there any way that I can pick this up again, or is it a done deal?

A. Do you really want to reopen this chapter of your life? You need to consider carefully whether you want to get involved in the expense, emotional upset and time commitment that will be involved in progressing your claim.

If you decide that you do, there are a number of points you will have to overcome.

First, under the Employment Relations Act, an employee who considers they have a personal grievance against the employer has 90 days from when the grievance happened to "raise" the grievance.

It is not clear from your letter whether you "raised" any grievance within 90 days. You don't have to do anything technical to raise the grievance - you simply have to make it clear to your employer that you consider that you have a personal grievance. Preferably, that should be done in writing.

The Employment Relations Authority can extend the time within which a personal grievance can be raised. One of the reasons it can do this is if you were so affected or traumatised by what happened that you were unable properly to consider raising the grievance within 90 days.

Assuming it is not too late to raise the grievance, your former employer will say that there has been a settlement of your claim. It is not clear whether you made a claim on the company that was then settled, or whether you had relationship difficulties with the company and were offered some money if you agreed to "go quietly".

You mention "redundancy money". Did your employment agreement provide for redundancy compensation?

The fact that you were employed as a temp suggests that what was paid to you could not have been redundancy money - temps usually don't have such entitlements.

If what was paid to you wasn't a true redundancy compensation payment, it may have been a settlement of a grievance that you had against the company. Or it may have been a settlement of "all issues arising out of your employment" - this is a standard formula - or a payment as part of an agreement between you and the company to end your employment.

The settlement will likely be upheld by the Employment Relations Authority. If you accepted the payment "in full and final settlement" on the basis that you would take no further action.

You might be able to get around this if the company extracted your agreement by oppressive behaviour, or if you were so distressed that you didn't know what you were doing.

Otherwise, if you agreed a "full and final" settlement, your claim cannot succeed. That does not, of course, prevent you from filing a grievance and trying to negotiate a further payment in mediation. Consult an employment lawyer to clarify your position.

Employment Relations Service

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