Without prejudice

June 29, 2007

Employers often conduct settlement negotiations with employees about employment problems on a 'without prejudice' basis, believing that whatever they say cannot be used against them if the employee sues them at an Employment Tribunal.

The principal underpinning 'without prejudice' negotiations is that where there is a dispute between the employer and employee, any written or oral communications between them that comprise genuine efforts to resolve their dispute, will generally not be admitted at any subsequent Employment Tribunal hearing. The rule supports the public policy consideration of encouraging parties to settle their disputes without resorting to litigation.

The recent case of Framlington Group Ltd and Axa Framlington Group Ltd -V- Barnetson (Court of Appeal), clarified the operation of the 'without prejudice' rule.

First there must be a dispute. The mere fact that a grievance has been lodged by an employee is unlikely to amount to a dispute which then protects the discussion between the parties with the cover of a 'without prejudice' label.

Secondly, litigation must be contemplated if the parties fail to settle. Again, discussions in an internal grievance process are unlikely to qualify, as the grievance hearing may provide the solution sought by the employee.

The advice to employers is that they should make it clear to employees that 'without prejudice' discussions are aimed at solving a dispute, and that if the discussions/negotiations fail, the employer is prepared to defend litigation.





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