Myth: Our staff cannot use a conversation we have with them in evidence against us provided it is held “off the record” or “without prejudice” [MELANIE STANCLIFFE]


Prefacing a conversation or correspondence with the words, “without prejudice” will not prevent that information being admissible in evidence (at a tribunal or court) unless it is made as a genuine attempt to settle a dispute.  For there to be a genuine dispute, litigation must have started, been threatened or be likely to take place if the parties cannot reach an agreement. 

Even if you have a genuine dispute with an employee, you won’t be able to rely on the without prejudice rule if the reason you are having the conversation, or the discussion itself, is improper or amounts to unlawful discrimination. 

Let’s take an example. A business needs to cut costs and needs to make redundancies.  Jane has recently announced that she is pregnant. She attends a meeting with her manager and is told “without prejudice” that she is going to be made redundant because her line manager considers her to be unreliable and they need someone who is going to be able to commit 100%.  She is offered an enhanced package as an incentive to accept the offer.  Jane will be able to refer to this conversation if she brings claims against her employer for sex/maternity discrimination, even though it was expressly said on a “without prejudice” basis and relates to a potential dispute.

Having a conversation “off the record” has no specific legal meaning or protections attached to it. If a conversation meets the without prejudice rules it can be excluded from evidence even if the parties do not explicitly state that it is made “without prejudice” or where some other expression is used, such as “off the record”.

There is one other way in which you might be able to have a conversation with a member of staff which you can keep confidential even if there is no current employment dispute or even where your employee is unaware that there is a problem.  Recent changes in the law now allow an employer to have a confidential settlement discussion (also known as “protected conversation”) with an employee about terminating their employment.  However, these conversations are subject to important limitations and can only be used to deal with misconduct or capability issues.  The advantage is that if used correctly, this can “short-cut” the disciplinary process and achieve an exit on agreed terms.

Settlement discussions are not confidential if the employee has raised issues about discrimination, harassment or victimisation or where he/she could bring a claim for automatic unfair dismissal (because he/she has asserted a statutory right, ‘blown the whistle’ etc),  or believes that you have  breached the terms of their contract of employment.  

If you wish to have a confidential settlement discussion we recommend you take a number of steps.  If you fail to do this, or make a mistake, the conversation is likely to be admitted in evidence against you. 

The first is to ask your employee to attend a meeting to discuss his/her behaviour or performance on a mutually convenient date.  Give him/her advance warning of the meeting and explain that it is voluntary and will be a “settlement discussion”. It is sensible to briefly explain what this means i.e. that the discussion will be “without prejudice” or “off the record” and the content will be inadmissible in legal proceedings.  Explain that you hope that this will enable you and the employee to have a frank discussion about the issue/s.  It is helpful (but not essential at this stage) to put this in writing.

If you pressurise the employee into accepting your offer, the conversation will lose its protected status and can be referred to in any subsequent proceedings the employee may bring against you.  You must be careful about the language you use and the impression it may give to the employee. For example, you should not threaten the employee (“take the offer or you’ll be dismissed anyway”), or appear aggressive.

If you are likely to reach agreement, you will need to prepare a settlement agreement and give the employee at least 10 days to consider it.  You will need to allow the employee to take independent legal advice (and normally an employer will pay a reasonable sum for this if agreement can be reached).

If agreement cannot be reached, you will need to continue or start your formal internal processes to deal with the issue.  You may find that these will be more difficult and protracted because the employee may believe that the outcome has already been determined and for this reason, settlement discussions are not always an easy option.