Industrious Ltd v Vincent [2010] IRLR 204 

The claimant was managing director of Horizon Recruitment until she resigned. It was claimed that there was later a TUPE transfer between Horizon and Industrious. Mrs Vincent brought employment tribunal proceedings, but these were compromised by an agreement with Horizon that she would be paid various sums. The compromise agreement complied with S.203 of the Employment Rights Act 1996.

A month after the compromise agreement was entered into, Horizon went into voluntary liquidation. The payments set out in the agreement were not paid. Mrs Vincent asked an employment tribunal, rather than a court, to set aside the agreement. She argued that it must have been known when the agreement was entered into that the payment provisions would not be complied with, and that she was misled into entering the agreement by misrepresentations.               The employment judge held that the tribunal did have jurisdiction. Industrious appealed. It argued that the employment judge had erred because the only task of the employment tribunal was to determine if the strict requirements of S.203(3) ERA 1996 had been complied with, and that other issues relating to the enforceability of the compromise agreement had to be determined in the courts.

The EAT disagreed holding that S.203(2) of the ERA 1996 permits the parties to make valid compromise agreements, but the word ‘agreement’ must mean a valid agreement and the employment tribunal has to ensure that any purported compromise agreement is, in fact, valid. Therefore, an employment tribunal has jurisdiction to determine whether an otherwise valid compromise agreement is unenforceable because it was entered into on the basis of a misrepresentation.