A potentially costly pitfall

ANDREW WEST of Gotelee & Goldsmith Solicitors, explains a common misconception about “without prejudice” discussions

In an employment context, “without prejudice” discussions are common when discussing terminating employment and setting out what the employer is prepared to pay as compensation, under a compromise agreement.

Although the High Court has confirmed the general principle, that “without prejudice” communications between parties in order to resolve a dispute are not admissible in evidence, there are some exceptions to the rule. There are circumstances where “without prejudice” material can be referred to.

The general “without prejudice” rule only applies where negotiations are being held to try to resolve a dispute between the parties.

Employers will sometimes make a commercial decision to dismiss an employee without following any procedure, or where there is no fair reason to dismiss.

They will often call the employee to a meeting without any warning, telling him/her why dismissal is being considered and offer a compromise agreement. The employer will often say that such a meeting is “without prejudice”.

Unfortunately these words have no magical properties.

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In this scenario, a “dispute” is unlikely to have arisen – the employee is being told, without warning, that their employment will be brought to an end.

Because of this, it is unlikely that the meeting can properly be considered to be “without prejudice”.

The employee would be able to refer to anything that was said to them by the manager during that meeting.

The consequences for defending any claim would be dire – it is as plain as a pikestaff that the decision to dismiss is already made.

The employee may be tempted to accept the offer set out in the compromise agreement.

For that agreement to be enforceable, however, the employee must take advice from a lawyer, who may explain that they are entitled to more compensation and use what was said at the meeting as leverage to increase the offer on the table.

Never assume that by saying that a meeting or correspondence is “without prejudice” gives you automatic protection – it can be a very costly assumption to make.

Always take advice.

n For advice, please contact Andrew West on 01473 298118 or email andrew.west@gotelee.co.uk .