Unfair dismissal: Extension of protection for pre-termination negotiations (s.111A ERA)
The term “without prejudice” is a rule of law which provides that statements made in a genuine attempt to settle an existing dispute, no matter how they are made, are not allowed to be shown to the court by one party against the other as evidence of the culpability of party making the offer to settle (i.e. settlement offer made without prejudice to the writer). The rationale being that it encourages parties to try to settle their dispute as quickly as possible and are therefore often used whilst proceedings are also underway. S.111A of the Employment Rights Act also states that “evidence of pre-termination negotiations is inadmissible in any proceedings on a complaint under section 111” (e.g. unfair dismissal).
In Faithorn Farrell Timms LLP v Bailey (UKEAT/0025/16) the EAT held that the wording of this section means that it is not just the terms of offers/negotiations made that is inadmissible, but the fact that there were any pre-termination negotiations taking place that should also be withheld from the tribunal, so as not to influence the tribunal. This is a substantial clarification of the law here as under the usual 'without prejudice' common law rule, it is possible to inform the court that genuine attempt to settle negotiations have taken place (i.e. via the list of documents at disclosure) without going into detail of the offers, though the parties may waive this privilege in relation to the detail as long as they both consent. (There are some exceptions to this, but this is the general rule.) The EAT clarified here that the wording of section 111A extends the without privilege protection to the existence of the pre-termination negotiations and that the protection afforded by section 111A is not a privilege that can be waived.
Published: 25 July 2016