When a dispute between two parties has arisen, they may attempt to negotiate a settlement. Any such ‘without prejudice’ correspondence and discussions cannot be referred to in Employment Tribunal or Court proceedings. However, the fact of without prejudice correspondence or discussions can be legitimately referred to (but not the contents or details of any such discussions). Parties can also agree to waive without prejudice privilege (allowing any without prejudice materials to be considered by the Employment Tribunal).
Section 111A of the Employment Rights Act 1996 introduced a new form of so called ‘protected conversation’, meaning that neither the existence nor the content of pre-termination negotiations can be disclosed in any ordinary unfair dismissal case in the Employment Tribunal. Unlike without prejudice privilege, S111A privilege cannot be waived even with all parties’ consent.
In most cases this should not impact on the defence of any claim as what was said in a protected conversation would not normally form the basis of the substantive ground for a defence. However, in cases where what is said is relevant, it may not be possible to refer to this in an ordinary unfair dismissal claim. This causes problems where the claim is not only for ordinary unfair dismissal, and in particular where the discussions are relevant to an automatically unfair dismissal case.
The Claimant was a part-time secretary until her employer indicated that part-time working would not be an option going forward, which led to a settlement discussion initiated by the Claimant on 10 December 2014. By 7 January 2015, when the Claimant’s lawyers wrote a without prejudice letter to the Respondent, it was agreed the parties were in dispute. On 15 January, the Respondent’s lawyers replied in a letter which was not marked without prejudice and was generally a defence of their own position referring only in passing to settlement negotiation. Following another without prejudice from the Claimant’s lawyers, and a reply that was not without prejudice from the Respondent’s, the Claimant raised a grievance on 26 January in which she made clear she was relying on the matters set out in her lawyer’s without prejudice correspondence.
When she eventually brought proceedings claiming unfair constructive dismissal and sex discrimination, she referred in her claim form to the initial discussions which took place on 10 December 2014, the without prejudice correspondence that followed from her lawyers, and the Respondent’s letters. The Respondent denied the claims, but did not object in their response to her open references to the negotiations which began on 10 December 2014 nor the ‘without prejudice’ correspondence.
The Employment Tribunal concluded that the ‘without prejudice’ correspondence and negotiations were not wholly inadmissible under either S111A or without prejudice privilege, since the Claimant was bringing claims for both unfair dismissal and discrimination. The tribunal also held that the parties could refer to the fact that an offer under S111A had been made, but not to its contents.
Both parties appealed to the Employment Appeal Tribunal.
The EAT noted that S111A states that where “an offer is made or discussions held with a view to terminate employment on agreed terms”, “evidence of pre termination negotiations is inadmissible”. This means that any evidence of pre-termination negotiations is inadmissible, and this includes referring to their existence, not just their content. The parties cannot consent to waive S111A privilege.
S111A only applies to ordinary unfair dismissal and not to any other claim. Therefore, evidence of pre-termination discussions is not inadmissible for other claims (subject to the rules on without prejudice). S.111A evidence can be admitted for other claims, but treated as inadmissible in respect of the ordinary unfair dismissal claim.
Since without prejudice privilege can only apply where there is a dispute in existence, in this case only correspondence on and since 7 January was truly without prejudice. Before that, only S111A applied.
It is possible for parties to waive without prejudice privilege but this requires agreement on both sides. This can be implied by conduct, but the conduct must indicate that waiver is unequivocal. In this case, the Claimant had referred to without prejudice correspondence in her grievance and her employer had not only not objected, but had referred to without prejudice documents in their response. Given that the without prejudice documents were also referred to in the tribunal claim form and the response to the claim, there had impliedly been clear agreement between the parties that without prejudice privilege should be waived.
What to take away
As it appears that S111A privilege can never be waived, care should be taken not to refer to this in any defence. This can lead to difficulties if part of a defence rests on the fact of pre-termination negotiations (e.g. to explain a delay in responding to a grievance by the fact that a S111A conversation was ongoing). If possible, it would be best to make clear the grounds on which without privilege applied in such cases as well as S111A.
Despite the EAT’s judgement, it is also still entirely unclear how, in practice, an employment tribunal will deal with evidence relating to s111A in a case of automatic dismissal and ordinary unfair dismissal. Whilst on the wording in the statute the EAT’s decision appears correct, it is difficult to see how, in practice, a tribunal can listen to evidence on one part of a claim but disregard it for another, without being at least indirectly influenced.
Despite all this, S111A discussions may be referred to where there is evidence of improper conduct. A similar, but narrower, test also applies under the without prejudice rule.