In the recent case of BNP Paribas v Mezzotero, the Employment Appeals Tribunal (EAT) provided some important clarification to employers on the scope of the ‘without prejudice’ rule.
On the facts of this case, the employee had brought a grievance relating to her treatment following her return from maternity leave. Mid-way through the grievance process, the employer held a meeting with the employee which it expressly stated was on a ‘without prejudice’ basis.
The employer explained that the content of that meeting could not be used for legal purposes. The employer further explained that there was no longer a job for the employee, and offered her a settlement package. She did not agree to the settlement terms, and later brought a claim at the Employment Tribunal, where she sought to rely upon the content of the meeting as evidence.
The EAT decided that the meeting was not ‘without prejudice’, and therefore was not privileged, because at the time of the meeting there was not actually a dispute – rather, the dispute arose from the meeting.
This case highlights the common practice of employers meeting with employees they wish to dismiss in an effort to convince them to sign away their employment rights in return for a settlement package. This is a quick and easy way of dismissing employees and if it works, there is no need to follow the correct procedures, because any potential claim at the employment tribunal will be compromised.
However, if the plan goes wrong and an employee does not sign up to the settlement terms proposed, they may later be able to rely upon the content of the meeting to demonstrate that any concurrent ‘open’ procedures were a sham, and that the dismissal was unfair.
Employers should take care when relying on the ‘without prejudice’ rule, and should consider the following issues:
Q What does it mean in practice if communications with an employee are ‘without prejudice’?
A If any communications between an employer and an employee, whether written or oral, are genuinely on a ‘without prejudice’ basis, then the content and fact of those comm-unications are generally privileged, and therefore cannot be admitted in evidence before an Employment Tribunal.
Employers sometimes try to rely on this privilege in inappropriate situations – for example, by simply announcing that a meeting is ‘without prejudice’, when in fact it is not. This mistake can prove very dangerous if the content of that meeting is later used in evidence in a tribunal claim.
Q So when are communications with an employee really ‘without prejudice’?
A Communications with an employee will only be ‘without prejudice’ if they are for the purpose of settling a dispute with that employee. The employer must, therefore, first be engaged in a real dispute with the employee. Simply saying that a meeting is being conducted on a ‘without prejudice’ basis will not afford the employer the ‘without prejudice’ protection if the meeting is for a purpose other than the settlement of a dispute.
Employers should note that the EAT in BNP Paribas decided that a grievance may not amount to a dispute.
Q Will the content of genuine ‘without prejudice’ communi-cations always be privileged?
A Not necessarily. There are some exemptions to the ‘without prejudice’ rule. Employers should be aware, for example, that if they make discriminatory comments to an employee during ‘without prejudice’ communications, those comments may be admissible on the basis that that they are abusive, and would therefore lose their privilege.
Q How can an employer ensure settlement negotiations are ‘without prejudice’?
A Negotiations will only be without prejudice if they are for the purposes of settling a dispute. Therefore, be sure that a genuine dispute exists before commencing the meeting, and that the purpose of the meeting is the settlement of such a dispute.
The employer should not be totally reliant on the employee signing a compromise agreement. It should conduct the correct dismissal procedures on an ‘open’ basis in tandem with any ‘without prejudice’ negotiations, and ensure that the two processes are kept separate. If without prejudice negotiations fail, the employer will then be able to fall back on the open procedures to establish that the process was fair.