Off the record or without prejudice discussions can be a useful tool for employers when attempting to resolve a dispute with an employee. However, simply labelling the discussion as 'without prejudice' does not necessarily mean that it cannot be revealed later at Tribunal.

In the current economic climate employers (and occasionally employees too) will often want to avoid time consuming procedures and seek to negotiate an agreed departure.  If the deal is agreed – fine.  However, if the deal is not done, employers can find acts done and statements made in trying to agree the deal used against them by the employee.  Courts and Tribunals encourage settlement so allow proper negotiations to be covered by the without prejudice rule.

The 'without prejudice' rule

 The without prejudice rule will prevent written and oral statements made in a genuine attempt to settle an existing dispute from being put before the Tribunal as evidence against the party which made them. For the rule to apply there must be a genuine dispute; both parties should agree that the rule applies and the discussions must not be improper.

Employers need to be careful with discussions on the back of a grievance being raised.  A grievance is not necessarily a dispute.  A grievance may be upheld or dismissed for reasons which an employee accepts, so that there is no dispute.

For the rule to apply both parties must agree to discuss the matter on a without prejudice basis, and the employee must understand and appreciate what 'without prejudice' means. If, for example, an employer simply states that the discussion is to be held on a without prejudice basis, bearing in mind the unequal relationship of the parties and the likely vulnerable position of the employee, it is unlikely that a Tribunal will consider this to be a conscious agreement and the without prejudice rule will not apply to this communication.

Finally, use of the rule must not be improper.  It would be an abuse of the rule to exclude evidence that undue pressure was applied, (such as threatening the employee to settle the claim against the company).  Similarly, it would be an abuse for admissions made in the negotiations, which support the employee's claim, to be denied in Tribunal.  

Employers need to be careful to ensure the rule applies properly or what they do may come back to haunt them, as illustrated by the cases below.

Vernon v London Borough of Hammersmith and Fulham

 For 6 years, Vernon made several applications for promotion to Principal Social Worker.  Each time she applied she was unsuccessful.  She brought a claim against her employer on the grounds that they had discriminated against her due to her race in the promotion procedure that they followed. During the course of settlement discussions, the employer's solicitor sent an email to ACAS confirming that they would not be making an offer to settle the case. The email went on to criticise the employee's abilities, stating that Vernon's poor report writing was one of the reasons why she wasn't suitable for promotion and referred to her Tribunal claim form, which contained grammatical and spelling errors.  The e-mail went on to state that she was not "capable of the promoted role of principal social worker". The solicitor agreed that the ACAS conciliator could forward the correspondence to Vernon, who was still an employee at the time. As a result of the content of this email, she added a claim for victimisation arguing that these comments were intended to deter her from pursuing her discrimination claim.  

The Tribunal held that the email had a "profound effect" on her as she found it extremely upsetting. The email went beyond the employer's stated defence (that it had simply appointed a better candidate) and implied that she was not capable of being promoted then or in the future due to her lack of ability.  The Tribunal held that this put improper pressure on Vernon to withdraw her claim. Therefore, even though the communication with the ACAS conciliator was labelled 'without prejudice', it was disclosable as evidence in the Tribunal.  Although ultimately the Tribunal rejected her discrimination claim, because of the email sent by the employer's solicitor to ACAS, Vernon was able to win her claim for victimisation.  

BNP Paribas v Mezzotero

 In the older case of BNP Paribas v Mezzotero, the Tribunal confirmed that it was not sufficient for the employer just to tell the employee that they intended to communicate on a without prejudice basis – a dispute between the parties had already to be in existence which they were genuinely trying to compromise and the employee must agree. Here, a female employee raised a grievance complaining that she had been prevented from returning to her old job following a period of maternity leave. She was invited to a meeting, at which she was told that her employer wanted to talk 'without prejudice' and she was offered the opportunity to leave in return for a settlement package. Ultimately settlement was not achieved and the employee brought a claim in the Tribunal at which she tried to use the content of the without prejudice discussion as evidence. Essentially she wanted to show that the response to her claim that the employer did not want her back was an immediate offer of a package not to return.  The Employment Appeal Tribunal ruled that the employer's suggestion of a settlement package was not protected by the without prejudice rule, on the basis that there was no prior dispute about termination. It was also decided that it was in the public interest that allegations of unlawful discrimination in the workplace could be heard by the Tribunal and, therefore, discriminatory comments made in the course of the without prejudice discussions were admissible as evidence.

What does this mean for employers? 

  • Ensure that there is a genuine dispute. If not – proceed with caution.
  • Get the employee's agreement to the without prejudice conversation and ensure that the employee understands what it means.
  • Be careful about the timing of without prejudice conversations during disciplinary, grievance or redundancy procedures. These various procedures could be held in tandem with without prejudice discussions. If settlement is not agreed then the employer should be able to rely on a fair procedure being followed otherwise.
  • Try to avoid making any damaging admissions during without prejudice communications, especially in discrimination cases. It is advisable to keep focussed on the settlement terms.
  • Ensure that all correspondence is marked "without prejudice and subject to contract" to highlight that written terms (usually a Compromise Agreement) will need to follow any oral agreement.
  • Avoid overly aggressive approaches.  A settlement achieved under duress can easily unravel.


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.