Back to basics: Without Prejudice and Protected Conversations
What are Without Prejudice and Protected Conversations?
These two types of conversations are methods available to employers who wish to settle an employment dispute with an employee. Such conversations usually, but not always, include conversations regarding an employee’s departure from the business under the terms of a settlement agreement.
In summary, such conversations are utilised to enable employers to have frank conversations with employees, the contents of which they do not want repeated or disclosed should an employee go on to bring an employment tribunal or court claim in the future.
These types of conversations are an important tool in an employer’s armoury; however, employers should be aware of the limitations of both types of conversations, and when they should and should not be used. Below we have broken down the differences between the two types of conversations and the most common pitfalls we have seen.
The Without Prejudice rule
The without prejudice rule governs the admissibility of evidence in a tribunal or court. Applying that to the employment context, where frank conversations are to be had with an employee which may result in an employment tribunal claim, employers are recommended to consider whether any such conversation can be had “without prejudice”.
The first, and most important point to note is that any correspondence or conversation will only satisfy the without prejudice rule where there is a dispute between the parties, including where litigation is live or contemplated, and where the correspondence or conversation is a genuine attempt to settle that dispute. If there is no dispute or litigation contemplated, employers should instead consider a protected conversation instead (below).
In an employment relationship, a dispute generally arises where the employee has raised a contentious grievance or litigation is live or contemplated between the parties. Employers may consider litigation is contemplated by an employee who indicates that they will “bring a claim” against the company or where the employee has instructed a lawyer to correspond with the employer.
Employers should ensure that any communication to the employee or their representative on the issue is marked “without prejudice” to ensure, as far as possible, that the contents remains out of the sight of the tribunals and courts. If the correspondence contains terms to settle a matter (such as a financial offer to the employee to end their employment) the additional wording “without prejudice” and "subject to contract” should be used. Marking a document as 'without prejudice' is a strong indication that there is a genuine dispute and a genuine attempt to settle the dispute, however, it is not conclusive and courts and tribunals can order disclosure of the documents if they believe the without prejudice wording is simply a sham.
Finally, it should be noted, that the without prejudice rule does not offer ultimate protection, and the employer cannot simply say anything they please in such meetings or correspondence. For example, where such comments or wording includes threats, dishonesty, fraud, blackmail, undue influence or a serious abuse of such privilege, the protection will be lost and a court or tribunal may gain the right to review such correspondence or hear evidence on the point.
If you are satisfied that your scenario can satisfy the without prejudice rules, we have summarised below how a without prejudice conversation usually occurs and how an agreement can become legally binding by the parties involved.
So, you know how to identify a without prejudice scenario, but what if you don’t have an existing dispute with an employee? The Government recognised this situation as an issue in 2013 and updated the Employment Rights Act 1996 to include a new section (s111A) to address this omission.
The fact that a dispute needn’t exist here is the main difference between the two types of conversations and highlights the importance of which conversation should be used and when.
The protected conversation route is a potentially useful way to have an off the record discussion with employees and is generally used when initiating conversations on an employee’s exit, whether that is resulting from a clash of personalities, organisational changes or simply used to save employers from going down a full capability process.
This approach works similar to the without prejudice rule, however it allows parties to discuss the terms of an employee exit without a dispute existing. Most employers use it to offer a settlement agreement to an employee who is over two years’ service, knowing that the discussions can’t be used in a subsequent unfair dismissal claim (as long as it’s not used improperly).
There are, however, significant limitations to the protected conversation approach. Protected conversations cannot be used to protect the content of discussions in claims for automatic unfair dismissals (such as whistleblowing or trade union membership for example). It also cannot be used where there are claims of discrimination, breach of contract, unlawful detriment or harassment, amongst other claims. In addition, similar limitations apply to improper behaviour that mirror the conduct excluded in without prejudice conversations above. For more information, ACAS has drafted a code of practice on s111A protected conversations, which gives examples of what might be considered “improper” behaviour which is available in a link at the end of this article.
Initiating a Without Prejudice/ Protected Conversation Meetings
Whilst it is not a requirement, it is common place for an employer to have a face to face meeting with an employee when entering into such conversations. This gives a more human element to proceedings, as opposed to written correspondence. Whilst ACAS does not provide specific detail as to how such conversations should take place, they do provide best practice guidelines for employers. The below is taken from ACAS best practice and previous cases on the matter and specifically looks at a situation where an employer is proposing a settlement agreement to end an employee’s employment and/or settle any claims;
- Employers should be clear that the meeting is without prejudice or a protected conversation and be prepared to explain that, if necessary;
- The employee does not have a legal right to be accompanied, however ACAS does advise it;
- If employee refuses to have such a conversation, the employer should stop the conversation and not coerce the employee into continuing against their will;
- The employer should be clear about the reasons for making the offer and provide sufficient detail to allow the employee to consider the offer;
- The employee should be given at least 10 days to consider the offer;
- There is a legal requirement for any employee given a settlement agreement to be advised by a relevant independent representative. There is no legal requirement for employers to contribute to legal fees, however it is common practice to do so. A contribution of £500+VAT for a straight forward settlement agreement is common.
When proposing a settlement agreement, it is generally advised to seek legal advice as there are a number of requirements an agreement must take to ensure it is legally binding.
What does this mean for you or your business?
Whilst a without prejudice conversation covers more claims, and should be used where possible, protection will be lost if it is an obviously manufactured dispute, so be careful. In these instances, a protected conversation may be of more use. But if there is a hint of discrimination or whistleblowing, for example, this will not offer you protection.
When used well and wisely, these tools are a great way of conducting the close of an employment relationship without the need for prolonged and expensive litigation.
What do you need to be doing now?
During our annual CIPD event, held on 15 October 2020, we raised the question of which areas of employment law delegates felt they would like to gain further knowledge on, to assist their day to day role in HR. Perhaps not unexpectedly given the current employment climate, Without Prejudice and Protected Conversations was a clear winner. This bulletin is in direct response to the feedback received during that event and shows just how much of a minefield getting it wrong can be.
As this topic is of interest to so many of our clients and contacts, we are going to run one of our free “bitesize” sessions on this topic in early 2021. Please sign up here for more information.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.