Protected conversations and without prejudice conversations are terms used in employment law to facilitate open discussions between employers and employees. These conversations provide a platform for both parties to explore settlement without fear of their words being used against them in future legal proceedings.
A protected conversation in permissible under Section 111A of the Employment Rights Act 1996 (‘ERA 1996’). It was introduced to allow greater flexibility and it applies even if there is no pre-existing dispute or an anticipated dispute. A “protected conversation” tends to occur when an employer wishes to discuss matters such as capability /performance or termination of employment. During these conversations, both parties can speak freely without the fear of the discussions being used as evidence in an employment tribunal.
There are limitations to a protected conversation under S.111A ERA 1996 as it only relates to claims for ordinary unfair dismissal. If an employee therefore brings other claims, the protected conversation may well be admissible.
It would be more beneficial for an employer to ensure that without prejudice privilege applies wherever possible, since this will protect the communications from disclosure in any proceedings. These discussions are aimed at resolving disputes or negotiating exit terms.
For without prejudice privilege to be engaged, a settlement offer must be aimed at resolving an existing dispute, e.g. once litigation has started. The key question, as identified by LJ Auld in Barnetson v Framlington Group 2007, is whether, in the course of negotiations, the parties contemplated or might reasonably have contemplated litigation if they could not agree.
As summarised by Mr Justice Bodey in BE v DE 2014, the applicable test is objective; it is not what the parties objectively thought about the communication at the relevant time that matters. Rather, the court has to work out what, on a reasonable basis, the intention of the author was and how it would be understood by a reasonable recipient.
If the parties did not contemplate (or could not reasonably have contemplated) that litigation would follow, then a dispute will not exist and marking a communication as being “without prejudice”, does not necessarily mean it will be inadmissible.
The without prejudice shield will also not apply if it would be unjust for it to protect unambiguous impropriety, fraud or blackmail.
It was noted in Faithorn Farrell Timms LLP v Bailey 2016 that whether a communication is without prejudice, does not depend upon whether the communication contains the words “without prejudice”.
In the recent case of Scheldebouw BV v Evanson, the EAT upheld an Employment Tribunal’s decision that a settlement offer made by an employer in the context of amicable exit discussions was not “without prejudice” because there was no dispute between the parties at that stage. This was as case in which Alex Pearce, Senior Associate of Pinney Talfourd LLP was instructed. Mr Evanson was represented by Counsel, Paras Gorasia of Doughty Street Chambers at the Appeal hearing, with Heather Williams KC acting for Mr Evanson at first instance. A link to the Judgment can be found here.
In conclusion, protected conversations and without prejudice conversations offer employers and employees a valuable opportunity to discuss sensitive matters openly, creating an environment to resolve disputes or negotiate mutually agreeable terms. However, it’s crucial for both parties to understand the limitations and legal requirements associated with these conversations to ensure a fair and lawful process.
If you are unsure about whether you are in ‘dispute’ with an employee, we would suggest that you obtain legal advice before making any settlement offers so that you can be confident that any offer can not be used against you at a later date.
Please do not hesitate to contact one of our specialist employment lawyers, who will be able to offer you the best possible advice to help you legally navigate through any employment disputes.
The above is meant to be only advice and is correct as of the time of posting. This article was written by Charlotte Dawe, Trainee Solicitor in the Employment Team at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of January 2024.