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Can ‘protected conversation privilege’ be waived?

Protected conversations

The concept of protected conversations was introduced by way of an amendment to the Employment Rights Act 1996 to make it easier for employers to enter into negotiations with employees about the possibility of terminating employment or agreed terms, without the threat of those pre-termination negotiations being used against them at a Tribunal in an unfair dismissal claim. The benefit of protected conversations is that they can take place regardless of whether there is a dispute between employee and employer.

Without prejudice discussions

By way of contrast, the ‘without prejudice’ principle only applies to situations where there is a genuine attempt to settle an existing dispute. For example, on-going disciplinary proceedings. If protected by this principle, the content of a without prejudice conversation is not admissible at Tribunal but the fact that they have taken place can be.

It is also possible to waive the privilege attached to without prejudice correspondence or negotiations meaning the content becomes admissible in proceedings.

Facts

Ms Bailey initiated pre-termination with her employer in December 2014. By January 2015 the parties were in dispute and solicitors for Ms Bailey wrote to her employer with the heading ‘without prejudice – subject to contract’. Correspondence between the parties was then exchanged.

Ms Bailey subsequently resigned and claimed constructive dismissal and sex discrimination. In her claim form, Ms Bailey referenced the ‘without prejudice’ correspondence and initiating pre-termination discussions. Her employer did not object to either reference in its defence.

The question for the Tribunal was whether the settlement conversations and related documents were protected by the without prejudice principle and/or the protected conversations rules and how that affected their admissibility.

Decision

The Employment Appeal Tribunal (“EAT”) held that despite the employer waiving its without prejudice privilege by not objecting to reference to without prejudice material in the claim form, statutory protection for pre-termination negotiations could not be waived. The fact that settlement negotiations had taken place and the content of such discussions were protected under the protected conversation legislation. The correspondence was therefore inadmissible in respect of the unfair constructive dismissal claim. However, correspondence was not protected in relation to the discrimination element of the claim as it would have been had it been covered by the without prejudice principle.

Comment

Employers will often postpone grievance and disciplinary procedures while engaging in settlement discussions. Delays in such procedures can be used against an employer at an Employment Tribunal and if neither employer or employee can refer to the fact that protected conversations were taking place, it may be difficult to explain the delay.

It is advisable for employers to protect their position by continuing open conversations alongside protected/without prejudice conversations to evidence the delay. However, employers should also be wary not to refer to without prejudice discussions in open communications and keep the two distinctly separate to avoid waiving privilege.

Employers should also bear in mind that protected conversation privilege only applies to unfair dismissal claims. Employees may be able to circumvent this by adding a discrimination element to the claim which would make settlement discussions potentially admissible where without prejudice protection did not apply. The overlapping rules make for some potentially complex issues around disclosure in claims including multiple allegations and specific advice should be sought at an early stage.

Please feel free to contact us on 0191 282 2880 for a no obligation chat or email us if you require any advice on settlement discussions.

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