Clarification on the Scope of Without Prejudice Discussions - An Employment Appeal Tribunal Decision

The recent Employment Appeal Tribunal (EAT) decision in Graham v Agilitas IT Solutions Ltd has provided some useful clarification on the extent to which an employer can use parts of confidential and/or without prejudice discussions held with employees as a basis for disciplinary action.

In this case, the employee had worked as a sales director from November 2013. During 2015 and 2016 the employer held a number of pre-termination negotiation and without prejudice conversations with the employee. During these conversations, the employer raised concerns regarding the employee's performance and sales. The employee was subsequently suspended pending an investigation into allegations of gross misconduct. Part of the allegations related to words used by the employee during the course of the meetings.

The employer claimed that the allegations raised concerns of a breakdown of trust and confidence in the employment relationship between the parties and went on to dismiss the employee  on this basis. The employee then brought claims of unfair dismissal, wrongful dismissal and unlawful deductions from wages against the employer.

The Employment Tribunal (ET) held that the conversations were not admissible as evidence in the proceedings.

On appeal to the EAT, the EAT agreed with the ET that, in principle, without prejudice privilege did apply to the content of the meetings between the two parties. The EAT determined, however, that the employer could not waive without prejudice privilege on parts of the meeting with the employee, but then rely on privilege in respect of other parts of the meeting in order that its own conduct during the meeting could not be considered at an employment tribunal.  The case was returned to the tribunal to decide whether the employer had waived its right to rely on the without prejudice rule in respect to all of the meeting.

Best Practice

Without prejudice communication is a useful tool for employers and means that where statements are made in a genuine attempt to reach settlement, whether orally or in writing, then they cannot be used in a court as evidence of admissions against the party which made those statement. However this EAT decision makes it clear that employers may find it difficult to compartmentalise conversations and waive privilege for some parts whilst seeking to rely on privilege for other parts.

Employers should draw a clear distinction between disciplinary conversations which might discuss the conduct of the employee (which an employer will want to be admissible in any proceedings) and conversations regarding potential settlement options (which an employer is unlikely to want to be admissible).

For more information, please contact Mark Stevens in our Employment law team on 0117 314 5401.