UK: Employment Update: Without Prejudice Negotiations: Employers Beware

Last Updated: 31 August 2004
Article by Christopher Booth

Originally published June 2004

Negotiating a quick exit for unwanted staff can sometimes seem an attractive option. Where there are no obvious grounds for dismissal, procedures may stretch into the future with no clear resolution in sight, and in the meantime a disaffected employee ties up lots of management time. The offer of compensation, in exchange for a resignation and a Compromise Agreement, might resolve the situation cleanly and effectively.

The difficulty is that such an approach may itself exacerbate the situation. The employee realises they have no future; in legal terms, their trust and confidence in the employer is destroyed by the knowledge the employer no longer wants them, thus grounding a constructive unfair dismissal claim, the very thing the approach was intended to prevent. In discrimination cases a similar problem arises: an employee complains, an offer to settle on terms including a resignation is made, and thus gives the employee grounds for a victimisation claim: if the original complaint had not been made, they would not have been told they have no future with the company.

Can conducting negotiations on a 'without prejudice' or ‘off the record’ basis prevent these problems arising? In some cases it can - if the without prejudice rule applies, details of the negotiations and any offer to settle will not be admissible in a court or tribunal (to encourage settlement of disputes and avoid litigation). However the without prejudice label will not protect all negotiations as the recent case of BNP Paribas v Mezzotero shows. In that case the employee returned from maternity leave to find that matters had moved on: other members of the department were now doing her work, and management felt it would be unfair to move them. There was really no job for her. When she complained, management suggested she take some leave, and then, on a without prejudice basis, offered a settlement to terminate the employment.

No deal was done and Miss Mezzotero subsequently claimed sex discrimination and victimisation: management had wanted rid of her because she had complained of discrimination. The company claimed their offer was privileged. The Employment Appeal tribunal rejected the claim: the employee could refer to the 'without prejudice' offer to support her victimisation claim. In the EAT's view, without prejudice privilege could never be used as a cloak to conceal serious impropriety, such as discrimination, from a tribunal. Moreover, on the particular facts of this case, there was at the time of the offer no 'dispute' to settle, but at most a grievance. Privilege did not therefore attach.

Practical implications

Where does this leave 'without prejudice' negotiations? Can they still be safely used? If there is a genuine attempt to settle a real dispute, and at least once legal proceedings are in prospect even if not actually commenced, privilege should still attach: otherwise it would never be possible to offer to settle even discrimination cases without the risk of a subsequent victimisation claim. The danger lies in the pre-emptive offer of termination plus compensation. Clearly, simply attaching the label 'without prejudice' will not in itself guarantee protection. In such circumstances, legal advice should now be taken before negotiations begin.

The cost of not consulting

Employers who fail to consult employees over collective redundancies may have a Protective Award made against them of up to 90 days pay for each of the employees affected. Three months pay can be a substantial sum, especially for 100 employees or more.

How then should a Tribunal decide whether to award the full 90 days or some lesser amount? Two approaches are apparent in the cases: firstly that the award is compensatory, in which case if the employer can show that consultation would have made no difference since closure was inevitable, only a small award should be made since the employees have suffered little by the loss of consultation; or secondly a punitive approach, in which case the award should reflect the seriousness of the employer's culpability in failing to consult.

Emphasising the absolute nature of the duty to consult, the Court of Appeal in the recent case of Radin v GMB has preferred the punitive approach. The starting point should be the full 90 days. If the employer can then show mitigating circumstances, for example that the failure to comply with the detailed obligations on providing information was only minor, or perhaps only just outside the time scale, then the award can be reduced accordingly. The loss to the employee is really irrelevant: after all, the award is a collective one, and the employees' particular circumstances are not taken into account; nor are earnings or notice pay received during the period. The decision is a strong one as, on the facts, consultation would have made no difference; closure was inevitable.

Practical Implications

A failure to consult just got more expensive. (In the Radin case itself the employer faced a protective award of some Ł250,000). Employers making 20 or more employees redundant need to take great care in this area - or face a severe sanction.

Do You Need To Know…?

Illegal Working and Immigration

With the expansion of the EU on 1 May 2004, the Government has introduced a scheme whereby individuals from the new member states who wish to work in the UK must register with the Home Office for the first twelve months. In addition, the Government has tightened the rules on the document checks which employees are obliged to make on all workers to prevent illegal employment. Details of both these important changes - which will need to be integrated into employers' recruitment procedures - are available at

New CRE Code of Practice: Consultation

The Commission for Racial Equality has produced a new draft Code of Practice for the Elimination of Racial Discrimination and the Promotion of Equal Opportunities to replace the current 20 year old Code. The new Code does much more than simply address the changes in the law since 1984. For example, it contains detailed guidance for employers on such issues as ethnic monitoring and racial equality policies. It also gives helpful examples from tribunal cases. Comments are invited to the CRE by 6 August, on a questionnaire available from the CRE's website:

Maternity Leave and Annual Leave

The European Court has ruled that a worker on maternity leave, which coincided with a period of annual leave fixed by collective agreement, was entitled to take her holiday entitlement on her return to work. According to the Court, 'a worker must be able to take her annual leave during a period other than the period of her maternity leave'. The ruling could cause problems in the UK where workers are not allowed to carry over holiday from one year to the next. The practical answer may be to encourage workers to take their holiday before going on maternity leave.

Cases referred to in this update:

BNP Paribas v Mezzotero 2004 EAT 0218/04; Susie Radin Ltd v GMB [2004] IRLR 400, Merino Gomez v Continental Industrias del Caucho SA [2004] IRLR 407.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.