Case law: Tribunal clarifies when discussions with employees about their performance are protected by 'without prejudice' rules

Employers should be clear whether or not the 'without prejudice' rules apply to their discussions with employees about their performance, and ensure they do not inadvertently breach those rules by, for example, referring to those discussions in subsequent disciplinary proceedings, as a recent ruling highlights.

In a dispute or potential dispute, statements made orally or in a document with a genuine view to settlement are 'without prejudice' which means they cannot later be used in court - for example, as an admission of liability. Without the rule, parties would be nervous about making admissions and/or reasonable offers to settle in case it prejudiced them later.

An employer discussed concerns about a sales director's performance with him on a without prejudice basis. The discussion included various options, including the possibility of terminating his employment. Further meetings failed to resolve the situation. Eventually, he was dismissed for gross misconduct and because there had been a breach of the trust and confidence required between an employer and employee.

The employee claimed unfair and wrongful dismissal. He wanted to rely on what the employer had said in its discussions with him in support of his claim.

The Employment Tribunal (ET) ruled that the without prejudice rule applied, so he could not use what had been said as evidence in support of his claim. However, the employee argued that the without prejudice rule should not apply as there had been no dispute or potential dispute when the discussions took place.

The Employment Appeal Tribunal (EAT) said that the issue was whether, in the course of their discussions, the parties had contemplated or might reasonably have contemplated court action if they could not agree.

It found that it was clear that concerns about performance could result in disciplinary proceedings (which included possible dismissal), and that this amounted to a dispute or potential dispute that could result in litigation. Therefore, the without prejudice rule applied.

However, the EAT also found that the employer might have waived the without prejudice rules, by using what was said in those discussions during the subsequent disciplinary proceedings against him. The EAT remitted the case to the ET to consider this point.

Note that there are also 'protected conversation' laws allowing an employer and employee to have discussions about the possibility of the employee leaving, and the terms upon which they might do so, without the employee being able to refer to those conversations later in the tribunals or courts if they subsequently claim unfair dismissal.

Operative date

  • Now

Recommendations

  • Employers should be clear when having discussions with employees about their performance, whether or not the without prejudice rules apply, and ensure they do not inadvertently waive those rules, for example, by referring to those discussions in subsequent disciplinary proceedings

Case ref: Graham v Agilitas IT Solutions Ltd UKEAT/0212/17/DA

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