In more detail

In Garrod v Riverstone Management Limited, EAT the claimant (G) sought to rely on the details of a settlement discussion in employment tribunal proceedings, alleging that they were not covered by without prejudice privilege.

Facts

G had submitted a grievance alleging bullying, discrimination and detriment, including in relation to her having taken maternity leave and becoming pregnant again. The employer, RM Ltd, engaged an external employment law adviser who arranged an initial meeting with G and her husband. Following discussion about her grievance, the adviser said he would like to speak without prejudice, and proceeded to outline a possible severance package, which G rejected.
Both G and her husband had legal academic qualifications, which the employment tribunal later decided meant that they would have understood what was meant by "without prejudice".

Legal background

Without prejudice communications (whether written or oral) cannot be referred to  in subsequent tribunal proceedings. In order for the protection to apply: 

• There must be an existing dispute at the time the communications take place.
• The communications must be a genuine attempt to settle the dispute.
• Litigation must be contemplated, or might reasonably have been contemplated.

There are some exclusions to the without prejudice rule, including that it will not be applied if exclusion of the evidence would act as cloak for perjury, blackmail or other unambiguous impropriety.

In the case of BNP Paribas v Mezzotero (2004), an employee had raised a grievance and in a subsequent meeting the employee agreed to have a without prejudice and the employer proposed a termination of the employee's employment in return for a severance payment. The claimant then sought to rely on the content of the meeting in a tribunal claim and alleged that the very fact of proposing termination in the meeting was an act of victimisation for having complained about alleged discrimination. The EAT held that without prejudice privilege did not apply as the Tribunal had been entitled to conclude that there was no dispute about termination of employment when the meeting took place and the meeting was not a genuine attempt to settle a dispute. The EAT also commented that the alleged discrimination by the employer would have fallen within the unambiguous impropriety exception, noting that discrimination was a "very great evil".

Decision and comment

In Garrod, the EAT concluded that the employment tribunal had been entitled to find that without prejudice privilege applied and the content of the meeting between G and the employment adviser could not be referred to. It emphasised that Mezzotero had said that these issues are fact specific and went on to note key differences with Mezzotero:

• In that case, the tribunal claim included the very fact that termination was proposed; the dicussion at the meeting itself was claimed to be an act of victimisation. In G's case, although she included details of the settlement discussion in her claim, she did not make a specific legal complaint about it; rather, it was part of the background narrative. In Mezzotero, if evicence about the discussion had been excluded, the claim would never have got off the ground, whereas in G's case the claim was about matters occuring both before and after the without prejudice meeting.
• Although a grievance will not always be an indication that there is a dispute, the Tribunal had been entitled to find that there was a dispute in this case.  The grievance closely resembled the subsequent tribunal claim, demonstrating that there was an existing dispute at the time of the settlement discussion. Her grievance mentioned infringements of legal rights, Acas and Early Conciliation, which all clearly signposted that litigation was a real possibility. The fact that G and her husband had legal knowledge supported the fact that those signposts to potential litigation were genuine.

The EAT accepted that the meeting was a genuine attempt to resolve the dispute, even though termination of employment was not what the employee requested in her grievance. It stressed that "to propose termination on terms is neither an unusual nor an impermissible means of attempting to compromise a dispute of that kind". Nor did the unambiguous impropriety exception apply - the facts of this case were a long way from being improper.

This is a helpful decision. Nonetheless, it is fact specific and the outcome might have been different if G had subsequently claimed that the settlement proposal itself was an act of victimisation (similarly to the Mezzotero case), or if she or her husband had not had legal training. It therefore remains important to structure without prejuidce conversations carefully. It will be necessary to carefully consider whether there is an existing dispute with the employee - the fact that they have raised a grievance might be sufficient but it will depend on the facts of the case. Depending on the case, it  might be helpful to canvass the option of a without prejudice discussion in advance, explaining what the label means, and give the employee f time to decide whether they wished to have the discussion. If the discussion does take place, the employer should be careful to avoid giving the impression that termination is a foregone conclusion.