Case law: court refuses to extend exception to 'without prejudice' rule - 06/06/2008
An employer offered to settle an employee's claim for sick pay, provided the employee resigned. The offer was made on a 'without prejudice' basis.
If what you say in your attempts to settle a dispute is 'without prejudice', it means it cannot be used against you if the dispute turns into court proceedings. The aim is to encourage parties to negotiate to settle a dispute without having to worry that what they say will be treated as an admission of liability or as evidence of what they are prepared to pay as compensation, if negotiations break down.
Last straw
The employee considered the offer to be the 'last straw' in her dispute with her employer and brought a claim for constructive dismissal - ie she argued that the offer was inconsistent with a continuing employer/employee relationship, and she was therefore entitled to treat herself as having been dismissed unfairly. The offer was therefore her evidence of unfair dismissal and the legal question was whether it could be used as evidence in her claim or whether it was protected as 'without prejudice'.
Exceptions
Recent decisions have created an exception for discrimination and victimisation claims. They have said that using 'without prejudice' does not protect things employers have said in negotiations, before a legal case has started, if those things are themselves evidence of discrimination or victimisation. The same has been held to be true in whistleblowing cases.
However, the Employment Appeal Tribunal refused to extend the exceptions to include unfair dismissal cases, so the offer in this case remained protected by the 'without prejudice' rule, and could not be used as evidence to support the constructive unfair dismissal claim.
Recommendations
Employers should be extremely careful what they say in negotiations that could lead to a dismissal, especially if they may lead to discrimination, victimisation or whistleblowing claims, even if they say them 'without prejudice'. Always take legal advice when circumstances arise that may lead to an unfair dismissal claim.
