For many employers, having a without prejudice discussion with an employee is a convenient way to try to resolve a difficult problem, whether it is dealing with an underperforming manager, a receptionist with a grievance, or a tricky redundancy issue. 

In practice, employers frequently make mistakes in initiating without prejudice discussions, potentially putting the business at risk.  How can you ensure that your without prejudice discussions are properly without prejudice, and what are the risks if you don’t get it right?

What do we mean by ‘without prejudice’?

‘Without Prejudice” can apply to any communication whether it is written or oral provided that it is made for the purpose of a genuine attempt to compromise a dispute.  It then won’t be admitted in evidence, meaning that it is ‘off the record’, and generally can’t be referred to by either party in any Tribunal or Court proceedings.  The labelling of a conversation or document as “without prejudice” is not enough, it must be properly without prejudice.

Why is it important?

The purpose of the without prejudice rule is to encourage parties to try to settle their disputes without fear that these discussions will jeopardise their legal position.  It is intended to encourage parties to see if the dispute can be resolved outside the Court or Tribunal.  If a conversation or document which is intended to be without prejudice loses that protection, it will mean that it could be referred to in any future Tribunal or Court.  Employers are usually reluctant for a Tribunal to be aware that they made offers to try to settle cases, as in some circumstances it can imply an acceptance of liability.

Get the timing right

A conversation will only be properly without prejudice where there is a pre-existing, genuine dispute between the parties.  In BNP Paribas v Mezzotero the Employment Appeal Tribunal found that there was no pre-existing dispute when an employer proposed terms on which an employee would leave the business, in circumstances where an employee had brought a grievance relating to her return to work from maternity leave.  The employee was therefore able to refer in Tribunal to the fact that she had been offered severance terms.  In a later case, Framlington Group v Barnetston the Court of Appeal said that the key question was whether the parties had contemplated or might reasonably have contemplated litigation if they should not agree.

If employers start without prejudice discussions too early, they could therefore lose the without prejudice protection attaching to those discussions because there may be no actual dispute existing at that time.  For example, an employee who lodges a grievance about his manager’s bullying and is then immediately offered a severance package would probably be able to refer to that without prejudice discussion at any Tribunal Hearing.

Be clear about the purpose of the discussion

One of the problems in Mezzotero was that the employee was ‘surprised’ by the without prejudice discussion.  Employers need to ensure that they tell employees that they want to have a discussion on that basis, and to check that the employee both understands what this means, and agrees to have a discussion on that basis.  If they fail to do this, there is a real risk that this discussion can be referred to by the employee in any future proceedings.  Ideally, it is a good idea for the employer to try to get the employee to suggest the without prejudice meeting if they can.

Watch out for ‘unambiguous impropriety’

In Mezzotero the Employment Appeal Tribunal said that even if there had been a dispute existing between the parties, the without prejudice protection would not have applied anyway because the conversation fell within the “unambiguous impropriety” exception.  There is a rule that one party can give evidence about what the other has said in the context of without prejudice conversations if the exclusion of the evidence would act as a cloak for perjury, blackmail or other ‘unambiguous impropriety’.  So, if an employer says to an employee ‘without prejudice, we don’t want you because you’re black’ or ‘without prejudice we just don’t want anyone who is gay working in our organisation’, that conversation would not be without prejudice, and would be admissible in any future proceedings.

Keep an eye on the open record

It is easy to get swept away by the without prejudice conversations, assume that a deal can be done, and forget entirely about the open process.  However, this can cause real problems if the employee ultimately decides not to take the deal.  For example, in a redundancy situation if an employee is offered a package on a without prejudice basis at the first ‘at risk’ meeting, the employer may not bother to continue with the proper selection process, or look for suitable alternative roles etc. This can leave the employer exposed if the employee doesn’t take the deal. 

Employers should try to ensure that they protect the business’ position on the open record, by continuing to follow as much of the open process as possible until the without prejudice proposal is accepted and a deal has been signed.

What’s in the pipeline?

The Government announced in November 2011 that it would be consulting in 2012 on enabling employers to have “protected conversations” with employees which would not be admissible in Tribunal or Court proceedings.  This would (in theory!) allow employers to have “frank” discussions with employees, for example about poor performance, without fear that anything said would enable the employee to refer to it in a Tribunal claim.  On the face of it, it seems likely that this will expand the situations to which without prejudice protection currently applies.  However, the devil is likely to be in the detail, and we don’t have the detail yet.  We will cover this in a future hrlaw article once the consultation has taken place.

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