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Without prejudice and protected conversations

In this month’s E-news we focus on protected conversations. As you maybe aware the Government introduced, which came into force on 29th July 2013, a new type of confidential conversation that employers could have, with their employees: protected conversations.

Without Prejudice conversations

Previously, the only way to have a confidential, conversation with an employee that could not be relied upon in legal proceedings was where there was a pre-existing dispute between the parties, and the aim of the conversation was to genuinely attempt to settle that dispute. This left employers feeling that they were limited in terms of the tools that they could use to resolve workplace problems.

Protected Conversations

Employers are now able to discuss settlement offers with the employee, in complete confidence, where there is no pre-existing dispute between the employee and employer. The law is set out at s.111A of the Employment Rights Act 1996, and which essentially provides that a conversation will be protected as long as the settlement offers and discussions relate to:

  • the ending of an employment relationship; and
  • unfair dismissal claims brought to an employment tribunal.

Employers should bear in mind that conversations that attempt to resolve other types of claim such as wrongful dismissal or breach of contract, discrimination claims and whistleblowing claims, will be admissible unless the employer can rely on a pre-existing dispute.

In reality, therefore, protected conversations are only useful in the most straightforward of dismissals and/or unfair dismissal cases. In certain circumstances, the reason for a settlement offer may, by itself, constitute the basis for a claim for discrimination to a tribunal such as offering a settlement to an older employee who has reached a certain age, in order to try to force him or her retire.

In addition employers will need to mindful of the fact that conversation will not be protected where there has been some ‘improper behaviour’ in anything said or done in relation to the settlement discussions. This includes any behaviour that amounts to blackmail, fraud, physical violence, harassment, bullying and intimidation.

If the employee rejects the a settlement agreement offer, then the employment relationship will continue as if the protected conversation had not taken place.

What amounts to a pre-existing dispute?

Although protected conversations are undoubtedly helpful for employers, the recent case of Portnykh v Nomura International plc illustrated how without prejudice conversations can still be a useful tool and addresses the question of when there is a ‘pre-existing dispute’.

Dr Portnykh claimed that he had been dismissed for blowing the whistle and making a protected disclosure. He claimed that his employer had failed to give him a reasonable explanation for his dismissal. Nomura International said that it had told Dr Portnykh that he would be dismissed for misconduct but that it would be prepared to present the termination as a resignation. Dr Portnykh’s response was favourable, but he suggested he wanted the termination to be structured as a redundancy.

The parties exchanged draft compromise agreements but an agreement was never reached and Dr Portnykh brought his claim in the employment tribunal.

Nomura International wanted to bring evidence about what had been discussed at the meetings, to show that Dr Portnykh had agreed to the termination being by reason of redundancy, but Dr Portnykh objected, saying that the conversations were protected by the without prejudice rule. The Employment Tribunal disagreed. They said that because there was no pre-existing dispute between the parties, the conversations were not ‘without prejudice’ and they could be disclosed.

The Employment Appeal Tribunal took a different view. Having reviewed the facts and considered what happened before the discussions between the parties about the compromise agreement, they decided that there clearly was a dispute in existence. This meant that the conversations were indeed ‘without prejudice’ and off the record.

The Employment Appeal Tribunal explained that a pre-existing dispute can exist, even when i) there was no ‘hostile atmosphere’; and ii) the employee has not launched proceedings, nor raised a specific complaint (e.g. of unfair dismissal). It held that for without prejudice protection to apply, there needed only be the ‘potential’ for litigation. The Judge decided that, like most negotiations of its kind, the correspondence in Dr Portnykh’s case arose in the context of a dispute so that it should be treated as without prejudice.

This case is good news for employers wanting to rely on a conversation as being without prejudice, perhaps in circumstances when it would not qualify as a protected conversation, as there need only be the ‘potential’ for a dispute for without prejudice protection to arise.

Summary: what to consider before the conversation:

If you have any questions, then please do not hesitate to contact:

Sejal Raja
t: 020 7227 7410

January 2014

© RadcliffesLeBrasseur


This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.