Mr N Luhar v Merrill Lynch International: 6001795/2025

EMPLOYMENT TRIBUNALS

Case No 6001795/2025

Between

Mr N LuharClaimant

Merrill Lynch InternationalRespondent

Before

Employment Judge Nicklin

In person for claimant

Mr C Kelly (instructed by Counsel) for respondent

Date 3 September 2025

JUDGMENT

[1]The Claimant has compromised all and any complaints he seeks to bring in this claim by reason of a signed settlement agreement dated 22nd August 2024 (“the Settlement Agreement”).

[2]The Claimant has no reasonable prospect of success in contending that he is not bound by the Settlement Agreement.

[3]The claim is struck out in accordance with Rule 38(1)(a) of the 2024 Rules.

REASONS

[1]By a claim form presented on 17th January 2025, the Claimant brought claims of unfair dismissal and discrimination based on race and sex and disability discrimination by association in respect of the termination of his employment with the Respondent which had commenced on 24th January 2022 and ended on 22nd August 2024.

[2]It is not in dispute that the termination of the Claimant’s employment arose by the conclusion of a settlement agreement signed by the parties and dated 22nd August 2024 (“the Settlement Agreement”). The Settlement Agreement, on its face, compromised any and all of the claims which the Claimant now seeks to bring to the tribunal. The Claimant contends that he is not bound by the Settlement Agreement and, accordingly, may proceed with this claim. The Respondent relies on the Settlement Agreement and, in the circumstances, by its solicitor’s letter of 17th March 2025, applied to strike out the claim on the ground that it has no reasonable prospect of success.

[3]I was the procedural judge who conducted an initial consideration of this claim under Rule 27 of the Employment Tribunal Procedure Rules 2024 (“the 2024 Rules”). Conducting that review, I converted the preliminary hearing listed for case management on 1st August 2025 to proceed as an extended preliminary hearing in public (by CVP) to determine the Respondent’s application to strike out.

[4]At the beginning of the hearing, I decided that it was necessary to hear an outstanding case management application in private (which had not been resolved by a duty judge prior to the hearing). A separate case management order will be

[5]I then converted the hearing back to a hearing in public in order to proceed with the Respondent’s strike out application (in accordance with Rule 54(2) of the 2024 Rules). Any members of the public wishing to observe the hearing were then notified that they could re-join if they wished to do so by the tribunal clerk. Both parties were able to make submissions on the application and I had the benefit of reading a hearing bundle running to 124 pages. I have also considered all of the documents provided in advance of the hearing by the Claimant, to include a timeline of events.

[6]At the outset of the public hearing, the Respondent explained that its application was put on the basis of ‘no reasonable prospect of success’ (Rule 38(1)(a) of the 2024 Rules), as set out in the letter of application, but could also be advanced under Rule 38(1)(b) (the manner in which the proceedings have been conducted by the Claimant is scandalous, unreasonable or vexatious).

[7]As the basis of the Claimant’s submission on the Settlement Agreement is that there were events occurring just prior to the agreement being signed which should be considered to have vitiated the agreement (rather than this being a claim which otherwise ignores or denies the operation of the agreement), the proper application of the strike out test is under Rule 38(1)(a) since I must decide whether the Claimant has a reasonable prospect of success in establishing that, on his own factual case at its highest, the Settlement Agreement ought to be found unenforceable. This involves consideration as to whether the Settlement Agreement complies with the requirements in section 203(1) of the Employment Rights Act 1996 (“ERA”) (and similar legislation) and the events alleged by the Claimant prior to concluding the agreement. Further and in any event, the application was not advanced in writing prior to the hearing on the footing that it was put within Rule 38(1)(b) and so the Claimant was not given notice of strike out being sought on that basis. I therefore consider that, in accordance with the overriding objective, the application is squarely an application under Rule 38(1)(a) and I shall assess it, below, on that basis. Strike out – Rule 38(1)(a)

[8]The rule, so far as relevant provides: The Tribunal may, on its own initiative or on the application of a party, strike out all or part of a claim, response or reply on any of the following grounds— (a) that it is scandalous or vexatious or has no reasonable prospect of success…

[9]In this case, it is important to make clear that the tribunal is not considering whether the Claimant’s claim has no reasonable prospect of success based on the ordinary merits of the complaints about the Claimant’s treatment during his employment. There are a number of factors to be considered on an application to strike out in such a case. In particular, where an application to strike out a discrimination claim is made, the tribunal must be cautious not to strike out a claim based on fact sensitive matters except in the most obvious of cases (Anyanwu v South Bank Students Union

[2001] UKHL 14

;

[2001] 1 WLR 638

; and Ezsias v North Glamorgan NHS Trust

[2007] ICR 1126

[10]In this case, the application is framed entirely on the Settlement Agreement, meaning that, on the Respondent’s case, the tribunal does not even get as far as considering how the Claimant says he was treated by the Respondent during his employment because he has contractually compromised all of the claims he has brought. Likewise, the Claimant accepts he did sign the Settlement Agreement and, but for the events occurring prior to him signing the agreement, it would otherwise bind the parties and prevent him from pursuing all of the complaints forming this claim.

[11]It is apparent that, were there no settlement agreement in this case, the tribunal would not be in a position to consider whether to strike out on the merits of the complaints at this stage because the detail about the allegations has not yet been clarified. It was unnecessary to go through that process in these circumstances because it is not being said that any of the complaints fall outside the scope of the Settlement Agreement. The Claimant either has a reasonable prospect of success in establishing that he is not bound by the Settlement Agreement or he does not. On that basis, I considered that it was in accordance with the overriding objective to consider the application at this preliminary stage.

Law

[12]The statutory requirements for a settlement agreement to be binding for the purposes of precluding a Claimant from being able to pursue claims to the Employment Tribunal (as an exception to the rule that a Claimant cannot contract out of their statutory rights) are set out in section 203(3) ERA. These are (in summary):a. The agreement must be in writing;

b. It must relate to the particular proceedings;

c. The agreement must only be made where the employee has received advice from a relevant independent adviser as to the terms and effect of the agreement and, in particular, its effect on his or her ability to pursue his or her rights before an Employment Tribunal and the adviser must have in force, when the adviser gives the advice, a contract of insurance or an indemnity provided for members of a professional body, covering the risk of a claim by the employee in respect of loss arising in consequence of the advice;

d. The agreement must identify the adviser; and

e. State that conditions regulating settlement agreements have been satisfied.

[13]In respect of claims under the Equality Act 2010 (“EqA”), the requirements are substantially the same as under the ERA but the requirements as to the statement of compliance are less prescriptive. The requirements as to the agreement will nevertheless be met where the parties conclude an agreement which has complied with section 203 ERA (see sections 144(4) and 147(3)(f) EqA).

[14]As to the Claimant’s challenge to the Settlement Agreement, this is based on an allegation of economic duress. He says that he had no choice but to sign the Settlement Agreement as he required the proposed extended medical cover offered by the Respondent as part of the settlement package. The Respondent referred the tribunal to the following two authorities on this issue. Firstly, Hennessy v Craigmyle & Co Ltd

[1986] ICR 461

and, secondly, Times Travel (UK) Limited and Anr v Pakistan International Airlines Corporation

[2021] UKSC 40

;

[2023] AC 101

[15]The relevant principles for establishing economic duress (as set out in detail in Times Travel) are:a. Economic duress is only a ground for avoidance of a contract if the contractor’s will was overborne so that it could be said that his consent was vitiated because he had no real alternative (Hennessy). In particular, as set out in Times Travel, there must be: i. The making of an illegitimate threat by one party; ii. Sufficient causation between the threat and the threatened party entering into the contract or making the non-contractual payment; and iii. The lack of any reasonable alternative to the threatened party giving in to the threat.

b. Illegitimacy of the threat is determined by consideration as to: i. the nature and justification of the demand made by the threatening party having regard to, amongst other things, the behaviour of the threatening party (including the nature of the pressure applied) and the circumstances of the threatened party. In general, commercial self interest in bargaining is justified; and ii. whether there was the kind of morally reprehensible behaviour or unconscionable conduct which, in the context of the equitable concept of undue influence, rendered enforcement of the contract (i.e. the settlement) unconscionable (Times Travel, per Lord Hodge and the majority of the court).

c. Whether there was economic duress was a question of fact for the employment tribunal (Hennessy). The Settlement Agreement

[16]The Settlement Agreement is dated 22nd August 2024 and is signed by the Claimant and on behalf of the Respondent. So far as relevant, the Settlement Agreement:a. Provides for a termination date of 22nd August 2024. The parties agree that the Claimant’s employment ended on this date by reason of this Settlement Agreement.

b. Agrees to settle any claims which the Claimant has or may have in connection with his employment, its termination or otherwise against the Respondent or the Banking Group of which it is a part.

c. Provides for the Claimant’s payments on termination as to salary and unpaid holiday entitlement and any other contractual entitlements up to the termination of his employment. There is no suggestion these have not been paid in accordance with the Claimant’s entitlement.

d. Provides for a compensation payment, a payment in lieu of notice, and a further modest payment as consideration for the Claimant’s obligations as to confidentiality and protective covenants to be made to the Claimant within 31 days of termination and the date on which the Respondent receives the scanned signed documents under the agreement. The Claimant accepts this was duly paid.

e. At clause 4.2 thereof, the Respondent agreed: “Subject to the Employee signing this agreement, the Bank will agree to continue the private medical insurance cover that the Employee currently benefits from for a period of 12 weeks from the Termination Date until 14 November 2024, subject always to the terms and conditions of the relevant scheme and cover”.

f. At clause 13 thereof, the Claimant agreed to waive his claims. In particular: i. The Claimant agreed he will not “…institute any legal or dispute resolution proceedings whether under common law, contract, legislation or otherwise in any country or jurisdiction, in respect of the claims set out in Schedule 1 (the “Relevant Claims”)” (clause 13.1); ii. Before signing the agreement, the Claimant acknowledged that he had disclosed to a relevant independent adviser all facts and circumstances that give rise to a claim against the Respondent or its officers or employees (or against any company in its Group) (clause

13.4.1 ); and iii. The Claimant confirmed that he had received independent advice from the relevant independent adviser and, in particular, the terms and effect of the Settlement Agreement on his ability to pursue his rights before an Employment Tribunal (clause

13.4.2 ).

g. The Claimant warranted, at clause 10.1.4 of the Settlement Agreement that, amongst other things, he will not present a claim to the Employment Tribunal in connection with his employment or its termination (save as provided for in clause 13.3, which covers matters such as accrued pension rights, enforcement of the agreement (although that would be a matter for a civil court), personal injury claims and future claims where no act or omissions had yet occurred).

h. The parties agreed (at clause 14 thereof) that the conditions as to a settlement agreement under the EqA or the ERA applied and were satisfied in relation to the Settlement Agreement.

i. At Schedule 1 of the Settlement Agreement, all of the claims presented in the Claimant’s ET1 claim form in these proceedings are covered by the list of claims waived by the Settlement Agreement.

[17]Accompanying the Settlement Agreement is the relevant independent adviser’s certificate dated 1st August 2024. This was signed by a solicitor at the Birmingham office of Mills & Reeve LLP. There is no suggestion that the adviser does not meet the statutory definition to perform the advisory function or that the certificate does not certify the matters required. The Claimant’s challenge to the Settlement Agreement

[18]The Claimant accepts that, on the face of it, he has signed a binding Settlement Agreement which waives the claims he has brought. He takes no point as to the Settlement Agreement’s compliance with the statutory requirements.

[19]The singular ground of challenge is that the Claimant contends that he was effectively forced into signing the agreement, in circumstances where he had otherwise resolved not to do so, because of a last-minute stipulation by the Respondent that, in order to receive 12 weeks’ continuing medical cover (under the Respondent’s scheme available to employees and their families) he must enter into the Settlement Agreement. This benefit was included at clause 4.2 of the Settlement Agreement after the Claimant had received advice from Mills & Reeve LLP on or before 1st August 2024.

[20]Assuming the Claimant’s evidence is accepted at final hearing, at its highest, the Claimant says about duress:a. He was not going to sign the Settlement Agreement after he had received advice from Mills & Reeve LLP.

b. The Claimant was subject to a redundancy procedure and, during this process, he says it had been agreed with the Respondent that he would receive 12 weeks’ continued medical cover after being made redundant (without entering into any settlement agreement). Accordingly, he says he was expecting to be able to refuse the proposed settlement, his employment would terminate by reason of redundancy and, along with any redundancy payment(s), he would have 12 weeks’ continuing medical cover thereafter.

c. The Claimant wanted the extended medical cover because of family illness. He says that the Respondent knew that this was important to him and that he or his family would make use of this benefit during the remaining insured period. There was, therefore, significant personal reliance on having this extended insurance as it would likely cover a planned medical procedure.

d. On 1st August 2024, the Claimant was told by email that: a.) the agreement was non-negotiable (it was effectively a ‘take it’ or ‘leave it’ situation); and b.) in order to secure the 12 weeks’ cover as a benefit following termination of employment, he will need to sign the Settlement Agreement (and clause 4.2 covering this benefit was duly added to a second draft).

e. The Claimant does not allege that any direct threat was made to him. He says the Respondent simply knew of his personal circumstances requiring the cover and made the extended benefit conditional upon him signing the Settlement Agreement. He did not want to sign and did so, he says, because he felt he had no choice in order to secure the medical cover.

f. He accepted at the time that, by signing the Settlement Agreement, he was giving up his claims and would not be able to pursue them. However, he acted in order to secure the medical cover and only later considered that the circumstances amounted to duress. Discussion and Conclusions on the Application

[21]In my judgment, there is no reasonable prospect of any part of the Claimant’s claim succeeding before the Employment Tribunal. This is because:a. The parties have entered into a binding contract of settlement which complies with the statutory requirements for the contracting out of an employee’s statutory rights under the EqA and ERA. The Claimant accepts he signed the Settlement Agreement and received the advice from Mills & Reeve LLP as a relevant independent adviser. On or around 5th August 2024, he returned the signed Settlement Agreement to the Respondent together with the signed certificate (in the form prescribed by Schedule 2 of the Settlement Agreement) from Mills & Reeve LLP. Taken together and then counter signed by the Respondent, these documents constituted the necessary steps to create a binding settlement agreement which: i. Is in writing; ii. Relates to the particular proceedings. The Claimant was, at that time in August 2024, contemplating claims in respect of the termination of his employment and treatment at work and these are covered within Schedule 1 of the Settlement Agreement; iii. Includes the Claimant having received advice as to the terms and effect of the agreement and his ability to pursue claims waived by it (including certification of that fact and that insurance was in place covering the advice given by Mills & Reeve LLP); iv. Identifies the relevant independent adviser in the certification attached to the Settlement Agreement; and v. The agreement states that the statutory conditions have been satisfied (at clause 14 of the Settlement Agreement).

b. In any event, the Claimant does not take any point as to compliance with the statutory requirements in respect of the claim and the arguments he now brings to the tribunal. His contention is that the Settlement Agreement is voidable for economic duress.

c. The Claimant does not have a reasonable prospect of success in establishing that he was forced by illegitimate threat into the Settlement Agreement. He does not contend that the Respondent did anything other than propose, on or around 1st August 2024, that the 12 weeks’ medical cover benefit would be included in the settlement package if he proceeded to sign the agreement. At its highest, he complains that it was unfair that this had already been offered to him as a benefit in his redundancy if his employment was terminated for that reason and not by an agreement.

d. Assuming he could have established the above promise on evidence at a final hearing (in circumstances where he did not enter into a Settlement Agreement), he may have had a remedy for a lost but agreed benefit arising from any unfair dismissal. Alternatively, he might have had a contractual claim as to a benefit promised but not delivered. However, the fact that, on the Claimant’s case, the Respondent denied or otherwise withdrew any promise of medical cover benefit after redundancy (i.e. where there was no settlement) and then offered this as a condition of the Settlement Agreement does not amount, by any degree, to an illegitimate threat.

e. The Claimant had a choice. It may have been an unattractive choice in August 2024 as to whether he should accept the settlement and receive the offered medical cover in clause 4.2 or whether he should refuse, be made redundant and pursue claims in the Employment Tribunal to include any loss of medical cover (as a benefit) on redundancy if he considered his dismissal was unfair. However, that does not mean that there was an illegitimate threat in the Respondent offering to add a condition (and an extended benefit) to its offer in order to encourage the Claimant to conclude the agreement. Further, there was an alternative (as explained above) even if that may not have assisted the Claimant at the time in respect of his or his family’s need for the medical cover.

f. This is a case where the Claimant has concluded, by himself, that he felt that he had no option but to ‘take the deal’ so as to be able to avail himself of the medical cover, whilst aware of the consequences of so doing following the independent advice. There is insufficient causation between his own conclusion and any action (amounting to an illegitimate threat) on the part of the Respondent. The behaviour of the Respondent is that they offered him a benefit; a further incentive to conclude the agreement. Even if it is right that the Respondent had previously offered the same cover to extend after redundancy if he was dismissed, any withdrawal of that does not, in my judgment, come close to amounting to morally reprehensible conduct rendering the Settlement Agreement unconscionable. At best, as set out above, it may have amounted to a contractual claim on termination to recover a benefit he says was agreed or a remedy in any unfair dismissal claim. The Claimant gave up such claims by entering into the Settlement Agreement and, accordingly, secured an additional benefit beyond that which had previously been offered within the terms of the agreement.

g. I have had regard to the fact that the Claimant received his independent advice from Mills & Reeve LLP prior to the additional benefit being added at paragraph 4.2. Counsel for the Respondent informed the tribunal that he is not aware of any authority affecting the enforceability of a settlement agreement where a benefit is added in this way after the advice. In my judgment, there is no reasonable prospect of this point affecting the enforceability of the Settlement Agreement. The independent advice covered the terms and effect of the agreement and the impact on the Claimant’s ability to pursue claims waived by it. He acknowledges he was aware of those provisions and the certificate from Mills & Reeve LLP confirms this advice was given. The requirement for the advice under the ERA and EqA does not extend to advice as to whether a particular benefit should or should not be offered in ‘the deal’ and/or whether the Claimant ought to accept those terms.

[22]Accordingly, for the above reasons, the Claimant’s claim does not have any reasonable prospect of success and must therefore be struck out.

Law

[1]By a written application to the tribunal dated 19th September 2025 (“the Application”), the Claimant applied for reconsideration of the judgment striking out his claim that was sent to the parties on 5th September 2025 (“the Strike Out Judgment”).

[2]The Application was properly made under Rule 69 of the tribunal’s Procedure Rules 2024 and brought within the 14-day time limit. I have therefore considered the Application in accordance with Rule 70.

[3]For the reasons set out below, in my judgment, there is no reasonable prospect of the Strike Out Judgment being varied or revoked and the Application must accordingly be refused pursuant to Rule 70(2).

[4]The Claimant has set out seven issues or bases for the Application. I shall deal with each in turn below.

[5]Firstly, the Claimant says that the Strike Out Judgment does not properly apply or give weight to the ACAS Code of Practice on Settlement Agreements.a. This was not a point advanced by the Claimant during the hearing on 1st August 2025. Notwithstanding, I have had regard to the ACAS Code of Practice. Nothing turns on the guidance in the Code as to the conclusions in the Strike Out Judgment because the issue concerning strike out was whether the Claimant had a reasonable prospect of success in establishing that the Settlement Agreement (as defined in the Strike Out Judgment) is unenforceable as a result of economic duress. That required an assessment of the prospects of the Claimant’s arguments, taking his factual case of what occurred at its highest and presuming he could prove all such facts.

b. Further, the Strike Out Judgment addressed the compliance of the Settlement Agreement with the statutory requirements for settlement agreements, although the basis of the Claimant’s argument that he is not bound by the Settlement Agreement was not, in any event, concerned with such compliance.

c. Insofar as the Claimant says that he did not have 10 calendar days (as recommended at paragraph 12 of the Code) to consider the offer of the additional medical cover, this is of no assistance the Claimant. The Claimant plainly had time to consider the Settlement Agreement and receive the statutory advice from Mills & Reeve LLP. The guidance is directed at ensuring that an employee has a reasonable period “to consider the proposed settlement agreement”. The offer of an additional benefit does not reasonably require a further 10 calendar days when the employee has already had time to consider the Settlement Agreement as a whole and obtain necessary advice. In any event, as above, this procedural point does not improve the prospects of success of the claim in circumstances where the Claimant is relying on economic duress.

[6]The second point is that the Claimant disputes the decision made in the Strike Out Judgment as to prospects of success on the basis that he says that the factual allegation of economic duress “warrants full evidential testing”. This does not establish any grounds to vary or revoke the Strike Out Judgment. The Claimant does not have any reasonable prospects of success in establishing that the Settlement Agreement is unenforceable for the reasons fully set out in that judgment.

[7]Thirdly, the Claimant says that there was inadequate consideration of legal advice timing and informed consent. This concerns the fact that the offer of the medical cover benefit, as an addition to the Settlement Agreement, came after he had received his statutory advice from Mills & Reeve LLP. This point was expressly considered and analysed at paragraph 21(g) of the Strike Out Judgment. The statutory requirements for advice were fulfilled and not affected by the subsequent offer of an additional benefit.

[8]Fourthly, the Claimant repeats the point made during the hearing of the Application that he was effectively compelled to enter into the Settlement Agreement because of his urgent family medical circumstances. This was comprehensively considered at paragraphs 21(e) and (f) of the Strike Out Judgment. There is a marked distinction between the Claimant feeling, personally, that he was compelled to take a particular decision in light of his family circumstances and an illegitimate threat made towards him by the Respondent causing him to enter into the agreement.

[9]The fifth point is that the Strike Out Judgment failed to consider government policy reform and the context as applicable to the Claimant’s situation when entering into the Settlement Agreement. The Strike Out Judgment applied the law to the facts as advanced by the Claimant, taking his case at its highest and presuming he could prove all relevant facts at final hearing, in determining the question of reasonable prospects. The Claimant does not set out the legal basis for the contextual matters on which he relies on this point, but, in any event, the general context set out does not affect the decision made. Had, on the Claimant’s factual matrix, there been a claim with reasonable prospects as to the unenforceability of the Settlement Agreement (including in respect of the contextual matters raised), the claim would not have been struck out. However, the factual case advanced, as set out in the Strike Out Judgment, does not come close to meeting the test for economic duress.

[10]Sixthly, the Claimant says that strike out was premature and unjust and factual issues ought to be determined at trial. Whilst factual matters are usually determined at trial, Rule 38(1)(a) of the Procedure Rules 2024 expressly provides for the striking out of a claim which has no reasonable prospect of success. As explained above and in the Strike Out Judgment, the decision has been made assuming that the Claimant could prove all of the facts on which he relies.

[11]Finally, the Claimant raises a number of further points which can be summarised as a failure by the tribunal to consider the broad conduct of the Respondent at the time that the Settlement Agreement was concluded where “a significant new condition at the last minute” was imposed. The Respondent’s conduct, on the Claimant’s case, was fully analysed in paragraph 21 of the Strike Out Judgment. The amendment to the Settlement Agreement was the addition of the medical cover benefit, not a ‘condition’ imposed upon the Claimant. Whilst the Claimant’s case is that this made the provision of that additional cover conditional upon entering into the Settlement Agreement, the options available to the Claimant were fully considered in paragraph 21(e) of the Strike Out Judgment. As above, the Claimant’s case as to the Respondent’s conduct, taking his factual case at its highest, does not have reasonable prospects of establishing economic duress.

[12]I have also considered the references to the relevant authorities set out at the end of the Application. The position is as set out above and in the Strike Out Judgment.

[13]Accordingly, there is no reasonable prospect of the Strike Out Judgment being varied or revoked and the Application must therefore be refused.