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EAT ruling on without prejudice discussions

Posted by TonyBrownEmploymentSolicitor on January 13, 2014

Without prejudice statements are inadmissible as evidence before a tribunal or court. However, in order to qualify as ‘without prejudice’, the statement must be made in a genuine attempt to settle an 'existing dispute'. It was commonly understood that to amount to a dispute a claim must either have been made or threatened.  Often this will not be the case in situations where an employer wishes to initiate a discussion with an employee.

However, the EAT’s ruling in the next case suggests that the concept of a ‘dispute’ is wider than a claim having been made or threatened and the ruling will be welcomed by employers wanting to have a frank discussion with an employee.

In the case in question, after the employer intimated its intention to dismiss the Claimant for misconduct, there followed a discussion about whether the termination could be framed as a redundancy under a settlement agreement proposed by the employer.

When negotiations broke down, the Claimant brought a tribunal claim alleging he had been dismissed because he had made protected disclosures. The employer wanted to rely on evidence about the negotiations to support its case that the dismissal had been by reason of misconduct. The Claimant resisted this, arguing that the negotiations were without prejudice and, therefore, inadmissible.

Siding with the employer, the tribunal ruled that the evidence in question was not privileged on the basis that there was no existing dispute between the parties.

That decision was, however, overturned by the EAT in which the Judge said that ‘If the employer announces an intention to dismiss the employee for misconduct and there are then discussions around the question of the alternative of the dismissal being for redundancy, no matter how amicable all that might be, it seems to me beyond argument that it either demonstrates a present dispute or contains the potential for a future dispute.’

Comment

The limitations of the ‘without prejudice’ rule (as it was understood before the latest case) resulted in the government introducing last year the concept of ‘protected conversations’. The intention behind such conversations was to restrict the admissibility of evidence of termination negotiations in circumstances where the without prejudice rule could not apply, because of the difficulty of showing an extant dispute.

However, because of their limitations, protected conversations are not always available. Accordingly, the EAT ruling that negotiations over an alternative to dismissal will often fall within the without prejudice regime, thereby potentially reducing the circumstances in which employers may need to rely on ‘protected conversations’, is very welcome.

But the EAT did not suggest that all such discussions will be protected by the without prejudice rule and it is worth bearing in mind that the employer in this case had already warned that it would dismiss the Claimant before negotiations were entered into. It is, therefore, easy to see how the parties would be conscious of the potential for litigation

If you would like advice about how the issues in this note apply to your situation, please contact Tony Brown on 01225 740097 or by e mail to tony@bathemploymentlaw.co.uk

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