Employers know that there are risks involved when they commence a workplace investigation and disciplinary process. They know that if they don't do it right, they open themselves to the risk of ending up in a Court or Tribunal, which may overturn their decision, award compensation and have serious implications for their reputation.
If an employee wants to shortcut the disciplinary process, or they are having a tough time at work and want to look at negotiating an exit, they can consider making a 'without prejudice' offer to settle the dispute by offering to resign in return for a settlement payout.
What does 'without prejudice' mean?
At law, the 'without prejudice' privilege generally prevents statements that are made in a genuine attempt to settle a dispute from being used as evidence should the matter proceed to a Court or Tribunal. The protection though does not automatically apply to all communications (conversations, emails etc).
During a workplace disciplinary process, for a 'without prejudice' communication to occur and for the above protections to apply, it must be genuinely aimed at settlement. Further, although settlement communications that are not expressly labelled "without prejudice" can still be protected, it is generally advisable that:
- any written communication making an offer be labelled 'without prejudice'; and
- if a verbal communication, the parties agree that the communication is without prejudice before any settlement offer is made.
Make your employer an offer to settle your employment dispute
It may sound bizarre, but employees have every right to make an offer to their employer to 'settle' a dispute., In the case of a workplace investigation, employers are not conducting a criminal investigation and, therefore, it is just a civil dispute between two parties.
Importantly, an employee should not simply make their employer an offer at any point in any way they choose. As an employee, making an offer in the wrong way can have devastating consequences.
At a high level, for an employee to get the offer and its process right, there are three key considerations.
1. The facts that led to the dispute between employer and employee
First, it is important to consider the allegations that are being made against an employee in their overall context.
The more serious the allegations, the harder it may be to successfully negotiate a settlement agreement. Any previous history of performance or misconduct issues may also be relevant.
The quality of the employee's relationships with co-workers and management prior to and at the time of the dispute should also be considered. Basically, an employee should be trying to ascertain whether management still wants them there or not, independent of how fair it is.
Lastly, an employee's place of work may also make a difference. The employer's legal structure, size, financial position and even history in handling workplace investigations (for example) can assist in determining whether a settlement payout is a viable option for that employer.
2. The timing of an offer to settle the dispute
As an employee, making an offer to exit the company for a settlement amount should be made at the opportune time. Every situation is different. The offer could most effectively be made in writing, over the phone or in a disciplinary meeting.
Sometimes, the opportune timing can be created or bolstered by pulling other levers that an employee has available to them which can add pressure to an employer to no longer want to have to deal with the employee. For example, if the employer has already made procedural errors in the disciplinary process, these can be pointed out at an appropriate time in an appropriate way.
3. Making an offer to settle 'without prejudice'
As stated above, for an employee to attract the protections intended by the 'without prejudice' principal, there are specific words that are advisable to say to their employer. Ideally, the employer will agree to the 'without prejudice' conversation so as to ensure there is no doubt that the privilege applies.
Provided that the 'without prejudice' conversation has been properly engaged in, then the employee is free to discuss the situation and make an appropriate offer.
As you can see, there are a number of important considerations to take into account before making a 'without prejudice' offer to settle your employment dispute. It can be extremely stressful to make an offer yourself, and often it will be more effective to engage a lawyer to handle this for you. To maximise the success of any offer, we recommend you seek legal advice prior to making the offer.
What happens after I make a 'without prejudice' offer to settle my workplace dispute?
Employer agrees with your 'without prejudice' offer
If the employer agrees, a suitable Deed is usually drafted for the parties to sign in accordance with the terms agreed.
If the employer drafts the Deed of Settlement, then the employee should have an employment lawyer consider its contents to make sure they are adequately protected. Otherwise, the employee can directly engage a lawyer to draft a Deed for them.
Employer does not agree with your 'without prejudice' offer
In short, if the employer rejects your offer to settle the dispute, the disciplinary process continues.
However, to be transparent, there is always the human factor when deciding to make a 'without prejudice' offer to settle your dispute, and there are always risks associated with this strategy.
Although an employee's 'without prejudice' offer cannot be used against them in a Court or Tribunal, and a competent employment lawyer can try to prevent the employee from being treated differently at work because of the offer, there is no way to ensure that the employer won't view the employee as someone who doesn't want to work for their business or someone who may be troublesome (in the employer's view) in the future.
So, if an employee wants to use the strategy of offering to settle the dispute, they need to make sure it is in the right circumstances at the right time and should always be made after seeking legal advice.
Get help with employment issues
If you're experiencing any issues with your employment, including if you are engaged in a disciplinary process, you should contact your union or one of our award-winning employment lawyers for advice and assistance.
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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.
