The Employment Appeal Tribunal (EAT) has upheld an employment judge's decision that an employee's grievance alleging bullying, harassment and maternity discrimination constituted an "existing dispute" for the purpose of the "without prejudice" rule in Garrod v Riverstone Management Ltd.
The claimant was employed by RM Ltd as Company Secretary. On 30 October 2019 she submitted a grievance in which she raised serious allegations against three senior managers, including pregnancy and maternity discrimination, bullying and harassment. On 8 November she had a meeting with RM Ltd's external HR and employment law adviser during which the main part of her grievance was discussed. The adviser then said that he would like to have a "without prejudice" conversation (assuming that the claimant knew what this meant; it transpired later that she did). He described this as an initial exploratory conversation about settlement with a severance payment, describing the employment relationship as "problematic" and offering £80,000 to terminate the claimant's employment. No agreement was reached, RM Ltd rejected the claimant's grievance and the claimant resigned and brought claims of pregnancy/maternity discrimination, harassment and unfair constructive dismissal. She referred to the 8 November meeting and RM Ltd argued that these references should be excluded on the ground of "without prejudice" privilege.
At a preliminary hearing the employment judge found that the "without prejudice" rule applied to the settlement offer made at the meeting as there was an existing dispute at the time of the meeting and the parties contemplated or might reasonably have contemplated that litigation would follow if there were no settlement. The employment judged rejected the claimant's argument that the "unambiguous impropriety" exception to the "without prejudice" rule applied, finding that nothing in the adviser's behaviour was anything other than polite and professional. The EAT agreed holding that under the "unambiguous impropriety" exception the "without prejudice" rule will be disapplied only in "the very clearest of cases" or in "truly exceptional and needy circumstances". Here the claimant was seeking to place a discriminatory interpretation on the act of proposing a consensual termination when there were no adverse findings about the way in which the meeting was conducted.
Take note: This decision shows that it may be possible for parties to be in dispute once a grievance has been brought and that therefore a without prejudice discussion about terminating employment may be possible. However, it won't always be the case that a grievance amounts to a dispute. In Garrod the fact that the claimant's grievance outlined her legal claims suggested that there was a dispute which would end up in litigation and therefore the without prejudice rule applied.
