Clarification of the Without Prejudice Rule
Wednesday 29th March 2023
The Employment Appeal Tribunal (EAT) recently considered and clarified when without prejudice protection will apply in the case of Garrod v Riverstone Management Limited.
Facts
In order for a conversation or correspondence to be protected by the without prejudice rule there must be an existing dispute (or it must be reasonably considered one may arise) and the communication must be a genuine attempt to resolve that dispute.
In this case, the Claimant raised a grievance against her employer regarding discrimination and harassment and had referred to ACAS early conciliation, a prerequisite to bringing an Employment Tribunal claim. The Claimant was subsequently invited to a ‘without prejudice conversation’ and offered a sum of money in exchange for termination of her contract. The Claimant’s grievance was not upheld.
The Claimant then brought a claim for discrimination in which she argued that the without prejudice protection should be lifted on the basis that: the without prejudice meeting formed part of her claim, there had not been an existing dispute, and the employer’s behaviour in suggesting termination was so bad as to constitute ‘improper behaviour’. She was unsuccessful in her claim and appealed to the EAT.
Decision
The EAT found for the employer. The EAT considered that the Claimant could refer to the fact that her grievance had not been upheld without needing to refer to the without prejudice conversation. Her claim did not hinge on being able to reference it.
Whilst a grievance does not always constitute a dispute for the purpose of a without prejudice conversation, the EAT confirmed that does not mean it cannot. The EAT also recognised that settlement agreements are common tools used by employers and the mere suggestion of one does not constitute ‘impropriety’ as suggested by the Claimant. On that basis, the Claimant’s appeal was dismissed.
Comment
Employers should consider carefully whether without prejudice protection will apply as there are limits to what can be covered. A grievance will not always be a dispute in its own right, however it can if it is apparent that litigation may commence if a resolution is not reached. In Garrod, the Claimant had made reference to ACAS conciliation in her grievance, so it was reasonable to assume that a claim would follow if the matter was not resolved.
Where it is not clear whether a matter is a dispute, or where there is no existing dispute at all, employers should consider whether a ‘protected conversation’ under s111A of the Employment Rights Act 1996 is more appropriate. While there is no requirement for an existing dispute under s111A, employers should be aware that ‘protected conversations’ only protect against unfair dismissal claims. If an employee chooses not to enter into a settlement agreement they will remain entitled to bring other claims, such as whistleblowing or discrimination claims, in relation to the content of the conversation. Protected conversations should therefore be approached with care and careful consideration should be given to the matters to be discussed.
Employers should always make clear to employees where a conversation is taking place on a ‘without prejudice’ or ‘protected’ basis, and this should be explained to the employee to ensure they are happy to continue and understand the protection.
