Without prejudice rule - discussions during grievance were inadmissible

The Employment Appeal Tribunal (EAT) has provided a useful reminder about how the without prejudice rule works in practice, writes Michael Halsey.

What is the 'Without Prejudice' Rule?

The 'without prejudice' rule prevents statements made in a genuine attempt to settle an existing dispute from being put before a court or Tribunal as evidence in proceedings. The purpose of the rule is to facilitate settlement by allowing the parties to speak freely in the knowledge that what they say will not be used against them if the matter proceeds to a hearing.

What were the facts of the case?

In the case of Garrod v Riverstone Management Ltd (Practice and Procedure, Unfair Dismissal, Maternity Right and Parental Leave, Harassment) [2022] EAT 177, the claimant had raised a grievance with her employer about pregnancy and maternity discrimination.

In November 2019 a grievance meeting took place. During the meeting, the respondent asked to speak on a without prejudice basis and offered the claimant a settlement to resolve the dispute and mutually agree the termination of her employment.

The claimant did not agree. The claimant's grievance was rejected and she resigned, bringing Tribunal claims for pregnancy and maternity discrimination, and constructive unfair dismissal.

Within her claim form, the claimant referred to the without prejudice conversation that had taken place during the November 2019 meeting. The respondent argued that these references should be removed and excluded from evidence as they were protected under the without prejudice rule.

Preliminary hearing

The Employment Judge held that the comments made in the ET1 about the without prejudice discussions should be removed. The Judge commented that there was an existing dispute between the parties and the claimant, who was legally trained, was aware of this as she had referred to using ACAS if the matter could not be settled. The Judge also held that there had been a genuine attempt to settle and there was no unambiguous improper behaviour that would disapply the without prejudice rule.

The claimant appealed to the EAT.

What did the EAT decide? 

The EAT dismissed the claimant's appeal. Only in ‘the very clearest of cases’ or ‘in truly exceptional and needy circumstances’ would the without prejudice rule be disapplied. For example, the without prejudice protection will not apply if it would ‘act as a cloak for perjury, blackmail or other unambiguous impropriety’. The EAT held that nothing unlawful had happened during the November meeting so the claimant's claim was not based on the without prejudice conversation and it did not need to be included in the evidence bundle.

The EAT also agreed the dispute was already in existence at the time of the grievance and the meeting. It was also reasonable to conclude that the claimant's references to ACAS and Early Conciliation were indicators that she may litigate. The offer made during the November meeting was seen as a genuine attempt to settle the matter.

What can employers learn from this decision?

This decision provides a useful reminder of how the without prejudice rule works in practice. In order to rely on the protection, there must be an existing dispute and the conversation must be taking place in a genuine attempt to resolve that dispute.

In the event there is no pre-existing dispute between the parties, it may be possible to have a 'protected conversation' under section 111A of the Employment Rights Act. A protected conversation can be used to allow employers and employees to have confidential discussions regarding the termination of employment even where there is no pre-existing dispute. However, employers must note that the protection afforded by section 111A only applies to unfair dismissal claims (excluding automatic unfair dismissal). Generally speaking, it is sensible to label correspondence as "without prejudice and confidential under section 111A Employment Rights Act" in order to benefit as far as possible from both protections.

Michael Halsey is a partner at VWV.