What does without prejudice mean?
“Without prejudice” in employment disputes means “without loss of any rights” or in other words “without prejudicing your legal rights”.
How is without prejudice used in employment related disputes?
It enables negotiations to take place freely where there is a dispute between the employer and employee on an “off the record” basis with a view to try and settle that dispute. Any communication in writing should be clearly marked “without prejudice“, and any verbal discussion should also be preceded with “without prejudice”.
It then follows that the settlement discussions cannot be used as evidence before a tribunal or court, or seen as affecting the parties legal rights in any way. This is especially important if negotiations break down, when one party may want to then use the without prejudice communications as a tactical advantage. The reason for this is because some “without prejudice” negotiations may typically contain a form of words or financial offers that could be interpreted an admission, and thereby put a party at a disadvantage at a tribunal hearing.
If there is no form of offer or proposal being made in a without prejudice communication, then it will not usually attract the right to be “without prejudice” and off the record. For example, a formal letter from an ex-employee setting out their allegations against the employer will not be true “without prejudice” correspondence, unless the letter goes on to state that the employee is willing to settle the claims on terms set out in the letter. If the parties cannot agree to admit such correspondence in evidence, the tribunal has the discretion to decide that the correspondence (or part of it) is not really without prejudice and should therefore be admitted.
Does there need to be a pre-existing dispute between the parties for the “without prejudice” rule to be valid?
This means if your employer goes straight in with a termination offer where you are claiming that you have been discriminated, then you would be able to use that offer as evidence against your employer if you wanted to. This would not show your employer in a good light.
What extra level of protection of the “without prejudice” rule is there in unfair dismissal cases?
Under s.111A of the Employment Rights Act 1996, which relate to unfair dismissal claims, there is no need for a prior dispute between the parties for a without prejudice offer to be made. This is known as a “protected conversation“. The position is different for discrimination and breach of contract cases, where the concept of a protected conversation does not apply.
The most common circumstances where there would be no prior dispute enabling employers to jump in with a settlement proposal is where there are performance issues or there is a personality clash. Your employer may not have previously mentioned any of their concerns to you, but behind the scenes they would be gearing up to bypass all processes and hope that they can agree fast terms for your departure.
Can my employer make a without prejudice proposal within a redundancy situation?
Yes, and this frequently happens. It does not necessarily mean that your employer has done anything wrong, but in many cases they may want to bypass some of the lengthy redundancy processes and give you an enhanced package instead. If you decide not to take it, then it will almost certainly be withdrawn and you would then go through the full redundancy process, but with no uplift in the severance package. You won’t be surprised to hear that most people will want to go down the without prejudice route- especially where the redundancy is genuine and not open to challenge.
What does “without prejudice & subject to contract” mean?
This means that any offer that is made is subject to the full terms of the proposal in writing, which will doubtless include many other clauses that relate to confidentiality, a timetable for payment, the tax position, mutual non-derogatory clauses and so on. Such terms will be set out in a settlement agreement, and you will need to take independent legal advice on this to make it binding.
Seeking early legal advice
It is usually best to seek legal advice sooner rather than later if you are seeking a negotiated settlement with your employer. You will need an employment lawyer in any event to advise you on the settlement agreement, which will set out the full terms.
We have advised and negotiated on tens of thousands of settlements with employers, and so are highly experienced in this area.