Employers often resort to ‘off-the-record’ communications to try to reach agreement with an employee without recourse to protracted internal procedures or to avoid ending up in court. Staff may subsequently seek to rely on such communications, meaning that employers need to be careful as these may not attract the protection of the ‘without prejudice’ rule.
Q What are the risks in embarking in ‘off-the-record’ negotiations with employees?
A In the absence of the protection of the without prejudice rule, an employee could rely on the content of the negotiations, such as admissions made by the employer, to facilitate settlement. Alternatively, an employee could point to such negotiations, or even the suggestion of such negotiations, to show pre-judgement of decisions in redundancies or disciplinary action. These could demonstrate the insincerity of subsequent procedures, or support a claim of constructive unfair dismissal.
Q What are the hallmarks of a genuine without prejudice discussion?
A There must be a dispute in existence and those discussions must be a genuine attempt to resolve that dispute. It is not enough that the parties are in dispute about something it is that particular dispute which the discussion must be intended to resolve.
Courts and tribunals are prepared to investigate whether a genuine dispute actually exists. For example, an employee raising a grievance will not necessarily be enough to give rise to a dispute. Grievance procedures are in place to deal with issues before they become disputes and if, for example, an employer upholds a grievance or the employee is satisfied with the explanation, the parties may never have been in dispute.
Q Is the agreement of the employee necessary to attract the protection of the without prejudice rule?
A Informed and considered agreement by an employee is the ideal. It is not always necessary, however. Take advice on whether the protection applies in the absence of agreement.
Q Can an employee who consents to entering into negotiations change their mind?
A Possibly, depending on the circumstances. The law in this area tends to favour staff, and tribunals will scrutinise and potentially disregard or overturn an employer’s agreement, particularly where there is inequality of power, or the employee does not have the benefit of legal advice and did not understand the consequences of their agreement. Indeed, the greater the detriment to the employee in the protection of the without prejudice label, the more the tribunal will question the agreement.
Q Does the without prejudice rule apply in discrimination disputes?
A If the dispute involves alleged discrimination then, even if the hallmarks are satisfied, an employee may still be able to refer to without prejudice discussions. This is to avoid the without prejudice rule being used as a cloak for ‘unambiguous impropriety’.
Due to the very nature of discrimination claims, there is a public interest in allegations being heard by a tribunal having all the relevant facts before it. Although this does not preclude without prejudice negotiations that seek to settle discrimination disputes, tribunals will be reluctant to differentiate between parts of the discussion that may fall within the exception and are therefore admissible (such as an alleged discriminatory comment) and those that do not and are therefore protected (such as a pure monetary offer). If there is any question of there being unambiguous impropriety, a tribunal is likely to permit the employee to rely on the entirety of the discussions.
Q What can employers do to minimise the risks?
A Try to obtain the employee’s agreement and explain what without prejudice means, preferably before such discussions begin so the employee has time to think and, if they wish, take advice. Label any relevant documents ‘without prejudice’. Think about whether the hallmarks outlined above are satisfied. Remember that if there is a risk of the existence of such discussions being used to allege pre-judgement of a decision, such as on redundancy, the later in the process the discussions are suggested, the less damaging any exposure of the discussions will be.
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Matters involving possible discrimination carry more risk. Carefully consider whether, when and how to embark on without prejudice discussions by obtaining legal advice. Try to keep away from discussing the detail of the dispute and be clear that no concessions are made as to the underlying dispute. Focus on settlement itself as this reduces the risk of any concessions or comments being made which may be of use to an employee in later proceedings.
By Matthew Whelan, solicitor, Speechly Bircham
