In Glasgow City Council -v- Dahhan 2016, the EAT has upheld a decision of the Tribunal to the effect that employment tribunals do have jurisdiction to assess whether an otherwise valid settlement agreement is unenforceable because one of the parties lacked the mental capacity to enter into it.

Mr Dahhan was employed as a teacher by Glasgow City Council. In 2013, he brought a claim against the Council for direct discrimination, harassment, and victimisation on grounds of race. A settlement agreement was signed, and Mr Dahhan withdrew his claims. A few weeks later Mr Dahhan wrote to the Tribunal, stating that he had lacked capacity to instruct his solicitor and to make decisions at the time when the agreement was signed; accordingly he wanted the judgment to be withdrawn and to proceed with his claims. The Council objected, and a preliminary issue arose as to whether in fact the Tribunal had jurisdiction in the first place to assess whether the Claimant had mental capacity at the relevant time.

The Tribunal held, and the EAT confirmed, that the Tribunal does in fact have the jurisdiction to assess whether a settlement agreement which is otherwise valid was nonetheless unenforceable because one of the parties lacked the mental capacity to enter into it. The Tribunal has a duty to consider such a question when it is raised by one of the parties. If after reviewing the evidence it considers that the individual did not have capacity, then the agreement will be unenforceable in its entirety.