Historically where an employee was offered a compromise agreement (now called a settlement agreement) this would be done on a without prejudice basis. The difficulty with this was that in order to be truly without prejudice this would be need to be in response to a dispute between the parties for the rules to apply. The issue of whether or not without prejudice correspondence should be excluded before the Employment Tribunal was the subject of a recent EAT case of Portnykh v Nomura International Plc.
In this case, the EAT held that the ET erred in finding that at the time there was no dispute between the parties that could attract the without prejudice privilege. The fact that the employer proposed to dismiss for misconduct which was then negotiated to be categorised as a redundancy dismissal with an ex gratia payment meant that there was a present or potential dispute notwithstanding the amicable nature of the negotiations. Further, the without prejudice rule could not be avoided simply because one party would be disadvantaged by the exclusion of the evidence. Now there is provision for the employer and the employee to have a protected conversation where the employer states the conversation to be on this basis. There is no requirement for there to be a dispute between the parties but the conversation cannot be relied upon by the employee in a Tribunal claim for unfair dismissal. This is provided that there is no improper behaviour on behalf of the employer in the meeting. The rules can be found in the new s111A Employment Right Act 1996 and ACAS has also issued guidance on protected conversations. Such conversations are normally a precursor to a settlement agreement but this is not always the case. Employees should also be given time to consider any offer made during a protected conversation.
Sarah King, consultant solicitor
Posted on Tuesday, 18th February 2014