In Graham v Agilitas IT Solutions Ltd, the EAT considered whether without prejudice privilege applied to conversations in which an employer raised performance concerns with an employee.

In August 2015 Agilitas' CEO held a conversation with Mr Graham that was said to be on a without prejudice basis. The meeting raised concerns about his performance as Sales Director and a number of options were discussed, including the termination of his employment. There were a number of further without prejudice meetings but no agreement was reached.

Mr Graham was eventually dismissed in August 2016 for gross misconduct and a breakdown in trust and confidence. He brought unfair and wrongful dismissal claims. At a preliminary hearing, the tribunal found that all of the relevant earlier meetings had been conducted on an agreed without prejudice basis and that they also amounted to "protected conversations". Evidence about the meetings was therefore inadmissible. The employee appealed against that finding.

The EAT confirmed that without prejudice privilege applied in principle. The relevant question was whether in the course of negotiations the parties contemplated or might reasonably have contemplated litigation if they could not agree. Where an employer takes the view that performance concerns about an employee should result in disciplinary action and possible dismissal it was "beyond argument" that the situation demonstrated a dispute or the potential for a future dispute that could result in litigation. The employee must have at least contemplated the possibility of litigation once he was called to a meeting to talk about his future on a without prejudice basis, particularly when he was presented with options that included the termination of his employment.

However, the tribunal had not given sufficient consideration to whether the employer had waived privilege by relying on what had been said in the August 2015 meeting as part of the subsequent disciplinary charges against the employee. That question was remitted to the tribunal.