Statements made in a genuine attempt to settle an existing dispute would generally be prevented from being put before a Court or Tribunal as evidence of admissions against the interest of the party that made them. This is known as the Without Prejudice rule. Essentially statements can be made by a party without that party losing or prejudicing their legal rights. Read on for more information on its relevance in employment related disputes.
Rationale For The Without Prejudice Rule
One of the reasons for the Without Prejudice rule is to encourage parties to litigation (or potential litigation) to settle their disputes out of court. Settlement discussions (and the settlement itself) will be facilitated if parties can speak freely, safe in the knowledge that what they have said and, in particular, any admissions made to try and settle the matter, may not be used against them should settlement discussions fail. The idea is that parties are more likely to settle if they are free to put all their cards on the table.
When Might Without Prejudice Communication Arise During Employment?
Disputes can occur between employees and employers during the employment relationship. If an employee has a dispute, the normal course of action would be for them to attempt to resolve that dispute informally or by way of a formal grievance process. If an employer is unhappy with an employee’s conduct or performance, they might invoke a capability or disciplinary process to deal with the issue. However, in some circumstances one or both parties may consider a settlement as an alternative way of resolving any disputes. Any written communication between and employer and employee about a settlement proposal should be marked Without Prejudice and any verbal communication should be preceded with Without Prejudice.
Does There Need To Be A Pre-Existing Dispute?
There must generally be a dispute in existence when statements are made and the Without Prejudice rule only applies to negotiations which take place in a genuine attempt to settle an existing dispute, for example in circumstances where discrimination or a breach of contract have been alleged. However, it is not always necessary for there to be a pre-existing dispute before Without Prejudice offers can be made. Section 111A of the Employment Rights Act 1996, which relates to unfair dismissal claims, allows for a ‘protected conversation’. If an employer has issues with an employee’s performance for example, they might propose a settlement straightaway, even if no performance concerns have been identified to the employee beforehand. This avoids a potentially lengthy capability procedure and achieves an earlier termination of the employee’s contract. Protected conversations often frequently occur in redundancy situations. In order to avoid a formal redundancy process employers may offer a settlement package which is on enhanced redundancy terms.
Once a settlement has been reached in principle between employer and employee, the parties would then usually enter into a Settlement Agreement. For further information about Settlement Agreements see https://lincslaw.co.uk/faqs/settlement-agreements/
Lincs Law Employment Solicitors Can Help You
If you would like advice or assistance on Without Prejudice negotiations or settlement offers, please contact us for a free enquiry on 01522 440512 or via the webchat or contact form on our website at www.lincslaw.co.uk.
Kathryn Bolton
Associate Specialist Employment Solicitor
Lincs Law Employment Solicitors
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