Without prejudice and protected conversations

“Without prejudice” is a legal term signifying that something is being done, proposed, or said without abandoning a claim, privilege, or right, and without implying an admission of liability. When used in a document or letter, without prejudice means that what follows cannot:

• be used as evidence in a court case (other than in discrimination claims);

• be taken as the signatory’s last word on the subject matter, or

• be used as a precedent.

Contents of such documents normally cannot be disclosed to the courts but, when a party proposes to settle a dispute out-of-court, it is the genuineness of the effort that determines whether the proposal can be disclosed or not, and not if the words “without prejudice” are used.

“Without prejudice” discussions allow the parties to hold settlement discussions that are kept secret from the employment tribunal. However, the without prejudice rule is subject to important limitations. For example, you cannot take advantage of it to threaten or bully, or to engage in discrimination (BNP Paribas v Mezzotero [2004] UKEAT 0218), and you can only engage in without prejudice negotiations to settle a pre-existing dispute.

This is an important limitation which, in practice, helps prevent employers springing discussions about “departure terms” on unprepared employees. The without prejudice discussion will usually take place against the backdrop of a formal disciplinary, dismissal or grievance process.

And in a workplace with union recognition, the employee will already be represented and an employer will need to think carefully about making a reasonable financial offer that properly reflects the value of any claim.

The government had announced its intention to introduce a new concept called “protected conversations” which were aimed at encouraging what the government refers to as “open and frank” or “grown-up” conversations with employees about issues like “poor performance” and “workforce planning”.

The idea was for a line manager to be free to initiate an “off-the-record” discussion with an employee about what is wrong with his or her performance and what might be done about it. This would have short-circuited formal procedures designed to give employees time in which to improve their performance against defined goals.

In effect, the proposal would have been a “get-out-of-jail-free” card for incompetent managers, or, as union solicitors Thompsons suggested, “a rogue’s charter for managers looking to bully, cajole and abuse”. The key feature of this proposal was that the content of the conversation could not have been relied on in an employment tribunal as part of an unfair dismissal claim.

However, the government has dropped this proposal. The reasons for this are set out at paragraphs 43 to 47 of its Ending the employment relationship consultation: www.bis.gov.uk/assets/biscore/employment-matters/docs/e/12-1037-ending-the-employment-relationship-consultation.pdf