UK: The End of ‘Without Prejudice’ Discussions?

Last Updated: 14 October 2004

Employers will often have "without prejudice" conversations with employees in the context of ‘managing out’ an employee where no dispute between the employee and the employer has actually arisen. However, such conversations are technically admissible in proceedings.

Employers will now need to be particularly careful when holding such conversations following the Employment Appeal Tribunal’s ("EAT") recent decision in BNP Paribas v Mezzotero.

Ms Mezzotero raised a grievance following her return from maternity leave. Her employer held a "without prejudice" meeting with her and offered her a termination payment if she agreed to leave the bank. Ms Mezzotero filed a claim of sex discrimination and victimisation in the Employment Tribunal. In her claim she referred to the termination meeting. The EAT decided that these allegations were admissible in evidence as the employer had abused the "without prejudice" rule.

The EAT set out the following principles which apply to "without prejudice" statements (whether written or verbal):

  • the "without prejudice" rule only properly applies where there is a real dispute between the parties. The fact that an employee has raised a grievance will not of itself be sufficient to amount to a dispute; and
  • even if there is a genuine dispute, the "without prejudice" rule will not apply to allow a party to conceal an admission of discrimination, blackmail or other "unambiguous impropriety".

The EAT’s interpretation of the definition of "dispute" will therefore not apply to the scenario where an employer wants to offer a compromise agreement to ease out an employee who is a poor performer or is otherwise not a good fit for the job. There must be a real disagreement between the parties which the employer is seeking to compromise. A grievance is not sufficient because it maybe upheld or dismissed for reasons which are acceptable to the employee. Employers should be very careful about broaching the subject of an employee leaving. Employers should be aware that these conversations may be admissible in proceedings, even if they are stated to be "without prejudice".

Even if there is a genuine dispute, employers will now need to be particularly careful about holding "without prejudice" conversations where an employee has raised a complaint about discrimination. If the employer proposes to settle a discrimination dispute (e.g. proceedings brought by an existing employee) or otherwise terminate the employment of someone who is in a genuine discrimination related dispute with the employer, such conversations will be admissible in proceedings. Therefore, employers should be aware that what is said in such conversations may be scrutinised by a Tribunal.

If a genuine dispute has crystallised regarding the termination of employment where there are no discrimination issues the employer will still be able to benefit from the "without prejudice" rule.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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