‘Without prejudice’ conversations are no defence against bullying claims, tribunal rules

Employers cannot selectively use parts of ‘without prejudice’ conversations to bring action against their staff unless they are prepared to open the entire conversation up to further scrutiny, according to a new Employment Appeal Tribunal (EAT) judgment that could have major implications for how HR professionals conduct disciplinary procedures.

In a case concerning Mr Graham, who worked as a sales director for Agilitas IT Solutions from November 2013 until his dismissal in August 2016, several conversations were initiated by the employer on a without prejudice basis regarding the employee’s performance. The EAT has now decided that when the firm chose to discipline and dismiss Graham on the basis of these conversations, it had to be prepared to share their contents during his subsequent legal action, particularly as alleged bullying had taken place during the meetings.

Without prejudice (or ‘protected’) conversations occur when a dispute between an employee and employer has not been resolved, or when one party wishes to discuss a potential exit from the business. Either party can initiate such conversations, and it is generally understood that statements made in a genuine attempt to settle a dispute cannot be used as evidence in court.

In Graham’s case, concerns had been raised by Agilitas’s executive board about his performance and sales record. The board instructed its CEO, Shaun Lynn, to conduct without prejudice conversations with Graham about these issues, as well as possible solutions to improve them. These discussions took place between August 2015 and February 2016.

One potential solution discussed was termination of employment, but no agreement was reached. Graham was then suspended from the business pending an investigation into gross misconduct in June 2016, and was dismissed on these grounds in August 2016. Agilitas used comments he made during one of the without prejudice discussions to bring disciplinary action against him.

He then brought unfair and wrongful dismissal claims at the Nottingham Employment Tribunal, stating that his former employer had bullied him. The tribunal did not consider the without prejudice evidence from either party, despite the fact that the alleged bullying took place within these conversations.

Graham appealed to the EAT against the decision, relying on Agilitas waiving its right to the without privilege conversation. The EAT found that Agilitas could not rely on privilege of without prejudice for parts of the discussions it held with Graham, without relying on the entirety of the conversations. The without prejudice privilege, in essence, could not be used to shield evidence of alleged bullying behaviour.

The case has been remitted to the tribunal for reconsideration, and it will also consider whether it believes the without prejudice privilege applied in principle – it did not consider this matter in the first instance – as well as whether the employee acted inappropriately.

Malcolm Pike, employment partner at Addleshaw Goddard, told People Management the case served as a “useful reminder” for employers about the importance of without prejudice conversations. “It’s in employers’ interests to resolve disputes with employees without reaching court or having anything held against the organisation legally,” he said. “Employers need this protection.”