Without prejudice discussions can be a useful tool for employers when attempting to resolve a dispute with an employee. However, simply labelling the discussion as ‘without prejudice’ does not necessarily mean that it cannot be revealed later at Tribunal. This was the finding at the EAT at a case we recently dealt with.
In Graham v Agilitas IT Solutions Ltd, the EAT had to consider whether an employer could rely on parts of a ‘without prejudice’ discussion and/or a ‘protected conversation’ to take disciplinary action against an employee, while at the same time relying on privilege to shield its own conduct during part of the conversation.
Mr Graham was a sales director for Agilitas and a shareholder in the company. Over the course of some months, several conversations between Mr Graham and the employer’s CEO were held to discuss concerns about his performance and sales. Various options were discussed including performance improvement and dismissal, but no agreement was reached. Conversations between Mr Graham and Agilitas took place, which were described by Agilitas as being’ without prejudice’ and/or a ‘protected conversation’.
During these conversations, Mr Graham made comments which Agilitas then later used as part of a disciplinary action against him when pre-termination negotiations fell apart. Mr Graham was subsequently dismissed and brought a claim for unfair dismissal amongst other claims.
Employment tribunal decision
A preliminary hearing was held, and the judge concluded that the conversations during the relevant meetings had all been on a 'without prejudice' basis and were 'protected conversations' under Section 111A of the Employment Rights Act 1996 (ERA 1996). The conversations were therefore inadmissible so far as unfair dismissal proceedings were concerned or indeed as the proceedings as a whole were concerned. Mr Graham appealed.
The Employment Appeal Tribunal held that 'without prejudice' privilege applied in principle. However, it also held that the company could not waive privilege on parts of the meeting and rely on privilege in respect of other parts of the meeting to shield its own conduct. If privilege had been waived, then it was waived in respect to the whole of the meeting, not just a part of it.
The ET had not considered whether the company had waived privilege by relying on what Mr Graham had said during the meeting in his subsequent disciplinary hearing. The EAT held that Mr Graham had raised an arguable case on this point and there would be a blatant injustice if he were not permitted to run this point in relation to Section 111A of the ERA 1996.
The EAT allowed the appeal and remitted the case back to the ET to evaluate the evidence and decide whether the company had, by its conduct, waived privilege in respect of the meetings and/or whether the company's reliance on part of the conversations by way of disciplinary allegations amounted to improper behaviour or conduct within the meaning.
As a reminder:
• ‘Without prejudice’ privilege applies where litigation is in contemplation in the event that parties cannot agree a way forward. Any voluntary waiver of ‘without prejudice privilege’ must be mutually agreed unless there has been ‘unambiguous impropriety’ (e.g. threatening behaviour or violence, perjury or blackmail).
• Pre-termination negotiations under section 111A ERA 1996 can be instigated by an employer or an employee with a view to agreeing the terms of the employee’s exit. Such conversations cannot be referred to in any subsequent litigation unless they demonstrate automatically unfair dismissal (including discrimination) or improper behaviour. In contrast to ‘without prejudice’ conversations, protected conversations or pre-termination negotiations can take place without a pre-existing dispute.
This case serves as a useful reminder to employers that they cannot pick and choose when the ‘without prejudice’ rule applies and that whilst using the term 'without prejudice' is of course relevant, it is not determinative, and it is also necessary to consider the purpose and content of the meeting.
If you need help and advice about having protected or without prejudice conversations, please do not hesitate to contact me or the employment team on 0113 350 4030 or at firstname.lastname@example.org.
Link to judgment: http://www.bailii.org/uk/cases/UKEAT/2017/0212_17_1210.html
SCE Solicitors is a boutique employment law practice based in Leeds which advises clients nationwide. Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with SCE Solicitors or other professional counsel before acting on the information contained here.