Employers and their advisers seeking to settle claims on termination of employment may be tempted to flag the potential for serious consequences for the employee should they refuse, for example alleging that their misconduct could amount to criminal or regulatory offences. There is a risk that allegations are made without due care, on the assumption that the communication will be protected from disclosure in any future tribunal proceedings by without prejudice privilege. However, this protection will be lost if comments amount to 'unambiguous impropriety'. A recent case has flagged the fine line between acceptable comments and improper pressure amounting to unambiguous impropriety, and emphasises the need for caution when making allegations in the context of settlement negotiations.

In Swiss Re Corporate Solutions Ltd v Sommer, an employee had copied her grievance emails, which included personal data and confidential client information, to her own personal email account and her husband's account in order to retain a copy of the evidence for use in her grievance. At the time the employer had described this as a low level data breach and instructed the employee to delete the material, which she did. However, in settlement correspondence the employer's solicitors described her actions as serious misconduct which could lead to summary dismissal, criminal convictions, fines and/or findings of a breach of the FCA Conduct Rules which would make it difficult for her to work again in the regulated sector. The employee was subsequently dismissed for redundancy. She brought various discrimination and dismissal claims and sought to admit the settlement correspondence in evidence.

At first instance the tribunal found that the allegations made in the settlement correspondence grossly exaggerated the severity of what the employee had done in order to pressure her to accept the offer, and so amounted to unambiguous impropriety. The Employment Appeal Tribunal disagreed. It noted that there can be unambiguous impropriety if an employer makes allegations dishonestly or in an attempt to blackmail, and that baseless or exaggerated allegations could be evidence of dishonesty. However in this case there was an arguable basis for the allegations, and no evidence of the guilty party's state of mind was available. The EAT could not find there to be 'unambiguous impropriety' except in a very clear case and with the benefit of evidence of the guilty party's state of mind (and the EAT doubted this was possible at a preliminary hearing without oral evidence). Exaggeration by itself is insufficient.

However, the EAT did note that the making of the allegations "sailed close to the wind". To avoid potentially losing without prejudice protection or at least having to defend the factual basis of allegations at a hearing, it is prudent to adopt a restrained approach in correspondence both from employers and their advisers, for whom professional conduct issues may also be relevant.

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