Watch out for 'without prejudice' label

There’s a common misconception that communications labelled ‘without prejudice’ are the perfect solution to difficult conversations. But, in a recent case, the Employment Appeal Tribunal found otherwise – with an employer’s ‘without prejudice’ letter becoming the subject of legal debate and found to have effectively terminated an employee’s employment.

Background

The employer’s ‘without prejudice’ letter explained that both the employer and the employee had “mutually agreed” to end the employment. But the employee tried to argue the letter was unclear and ambiguous.

Whilst the letter also referred to a settlement offer, the only thing the employer hadn’t decided was what to pay the individual as a goodwill payment – the employer was quite clear the individual’s employment was ending. On that basis, the letter terminated the employee’s employment.

There’s still a place for well-crafted ‘without prejudice’ communications. Here’s what to consider:

Always get your communication checked by a lawyer – there’s plenty of case law in this complex area and the implications of poorly drafted communication can be significant;

‘Without prejudice’ can help protect any settlement offers you make from being used against you in future litigation. But, only where there is an existing dispute (an employee has raised a grievance, for example). Assuming there’s an existing dispute, ‘without prejudice’ communications protect against all claims, including discrimination and whistleblowing.

Get in touch if you need our support to navigate this complex and high-risk area.

This update is accurate on the date it was sent (16 March 2023), but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.