The Minefield of Pre-Termination Discussions

‘Without prejudice’ conversations are a human resources hotspot. What can be said freely in the lead-up to an employee’s termination without fear of it being repeated during a tribunal hearing is, at best, confusing.

But what about where the employer is prevented at tribunal from referring to discussions which it did not think were properly without prejudice? (Those relaxed conversations which were not influenced by the threat of an impending tribunal claim, for instance?) The Employment Appeal Tribunal (EAT) has highlighted how details of the most amicable discussions where there is no actual dispute can be inadmissible in evidence.

In a recent case, Ms Portnykh was dismissed for gross misconduct. There were then some negotiations between her and her employer about whether redundancy could be the reason for her dismissal and a draft compromise agreement was prepared. When these negotiations broke down she brought an unfair dismissal claim.

One of the issues was whether correspondence relating to the negotiations and marked ‘without prejudice’ could be referred to during the claim. Her employer wanted to rely on that correspondence in its defence but Ms Portnykh argued – successfully – that it was inadmissible.

The EAT held that there does not have to be an ‘actual’ dispute between the parties in order for discussions to be truly without prejudice; the rule can apply where there is a ‘potential’ dispute too. And there doesn’t have to be a claim in progress or a hostile environment in order for there to be a ‘dispute’. It’s enough that there is the potential for litigation.

In this case, discussions about redundancy and ex-gratia payments clearly pointed towards there being either a dispute or a potential dispute.