Posted by Richard Woodman, Partner
Inadmissibility of protected conversation discussions
In Faithorn Farrell Timms LLP v Bailey the EAT has given the first appellate guidance on the scope of the amendment to the Employment Rights Act to incorporate the provision of protected conversations under Section 111A. Since this was introduced in July 2013, evidence of pre-termination negotiations in unfair dismissal claims have been rendered inadmissible in circumstances where, prior to the introduction of this provision, there would have needed to be a genuine dispute in the workplace in order for such discussions to attract the without prejudice protection. In this case, the EAT has held that the inadmissibility of referring to these conversations goes further than the content of the negotiations and extends to the very fact that they have taken place; and that, unlike the without prejudice privilege, this privilege cannot be waived.
The Respondent (the Claimant in the original tribunal case) was employed by FFT as a secretary for 6 years until she resigned. Prior to her departure she initiated discussions about a settlement agreement and the parties exchanged “without prejudice” correspondence discussing settlement terms. However a few weeks later the employee raised a grievance in which she referred to the previous discussions “in open correspondence”. The employer replied in a without prejudice letter and the employee stated that she did not consider the discussions to be privileged. She then lodged claims of unfair constructive dismissal and sex discrimination and referred to the settlement discussions in her Particulars of Claim. The employer did not object to this reference and in fact used the same material to support its own case. However the question of admissibility was later raised at the tribunal hearing.
The tribunal found that the documents were not totally inadmissible, either via the without prejudice rule or by Section 111A, which precludes from consideration evidence of “any offer made or discussions held” with a view to ending employment on agreed terms. With regards to Section 111A it commented that the exclusion only covers the details of any settlement offer or discussions held and not the fact of them taking place. As to the without prejudice rule, it held that the details of the offer made were privileged but correspondence setting out the parties’ position was not.
The employer appealed to the EAT arguing that the tribunal had adopted too restrictive an approach to Section 111A and that it should have found that all correspondence was covered by the without prejudice rule. The employee cross appealed, arguing that any without prejudice privilege which existed had been waived.
The appeal was allowed in full and the cross appeal in part. The EAT held that Section 111A covered not only the content of any offers but the fact of them being made and the existence of any negotiations so these cannot be used to support an unfair dismissal claim. It also held that discussions within the employer such as between different managers or HR were similarly protected and could not therefore be referred to in proceedings.
The EAT went on to hold that the Section 111A privilege could not be waived, unlike the without prejudice protection. It is not open to the parties to agree between them that evidence which would otherwise be inadmissible, can be heard. The EAT particularly noted that, in drafting Section 111A, the Government had decided not to utilise the same rules which cover the common law without prejudice rule. However it did find that the fact the employer had not complained about the employee’s reference to without prejudice material in her ET1 and in fact had relied on the same material indicated that privilege in respect of that had been waived and that the tribunal had been wrong not to consider whether the employer had waived that privilege.
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