ONE OF the great urban myths about law is that if you write the words 'without prejudice' on the top of a letter or have a chat 'off the record', you will somehow be protected from your words coming back to bite you in court.
In fact, the phrases are so much misquoted in the bars of Britain that one of the lawyers I worked for years ago found it highly amusing to mark his threatening letters 'with extreme prejudice' to underline the point - mind you he also use to add the words "ignore this facsimile at your peril", so we can't put too much store on his views generally.
So how does an employer go about having an off the record chat with an employee? What if they want to say that they are prepared to go through a poor performance process with him but think it's pointless and would prefer to pay him off? Admitting this openly would surely undermine any process they adopt if a deal can't be agreed. So what can be done?Dispelling a myth
Well, let's start by dispelling the first myth - there is no such thing in legal terms as off the record. As anyone who has dealt with a journalist will tell you, it may not mean much in the domain of the press but that is probably where the phrase best belongs. The idea is that you can tell the journalist information in confidence to guide them, without it being printed.
The implied threat is that if they break your 'deal' you won't give them titbits again. Sadly ex-employees are not so trustworthy - and we, their lawyers, are even worse.
As a general proposition, anything you have to say to an employee is probably going to be used as evidence if they should decide to bring a claim. The best advice is, if in doubt, say only that which you would be prepared to hear repeated at an employment tribunal. In a recent case I dealt with, an off the record comment by an HR officer informing a female colleague that her breasts were 'f***ing enormous' wasn't entirely helpful to his company which was defending a sex discrimination claim. It was true - but unhelpful.
The only comfort therefore has remained the concept of a 'without prejudice' chat, and even this has been the subject of recent debate. Put simply, the words were never meant to act as a cloaking shield for ill-conceived letters or comments, but were a way of accepting or conceding points for the purpose of negotiation.
The idea was to help people avoid litigation, since without some protection few would make an offer to settle a dispute even if they thought they might lose their case (thinking it would look like an admission of guilt).
Typically, litigation lawyers would therefore write an 'open' letter to the other side accusing them of heresy, treason, etc, and then in the same envelope add a separate 'without prejudice' letter conceding some fault and suggesting a compromise deal.
This is not to be confused, of course, with sending a letter to the other side saying they will be creamed if they don't surrender, alongside a letter to your own client conceding that he has a terrible case - which letters should never go in the same envelope (and I do know someone who once did just that - leading to the use thereafter of window envelopes)!
Dealing with problem
In the employment world this would often work like this: an HR officer would call you in. He/she would tell you what the problem is and that there would need to be a process to deal with it. You would then be asked if you would like to speak 'without prejudice'.
Having agreed they would tell you that frankly you are 'toast' and offer you a sum to go away quietly.
This all worked rather well until the case of BNP Paribas v A Mezzotero (2004) IRLR 508. Here an employee had raised complaints about her employment and the company had tried to resolve the whole thing ultimately within a 'without prejudice' chat. The problem was that the employment appeal tribunal was reluctant to find that there was a 'dispute' at the time the conversation took place (which it felt was a necessary ingredient to the magic words working). The employer therefore was stuck with its comments being regarded as 'open', which proved somewhat problematic.
Lawyers were then stuck with arguments about what was a dispute. Was a grievance enough? Did specific threats have to be made? This led to an ice age in such chats, with informed employers refusing to have them until at least a formal threat of litigation had been made, and badly informed ones being held hostage by their own words.
Position clarified
I am, however, pleased to report that the position has been clarified now by the Court of Appeal in Framlington Goup Ltd (2) Axa Framlington Group Ltd v Ian Barnetson (2007) EWCA Civ 502. Recognising the problem, the higher court has decided that the crucial consideration is actually whether "in the course of negotiations the parties contemplate or might reasonably [contemplate] litigation if they could not agree".
In plain English this should mean that my HR officer, in identifying that the employee is on their way out come what may, has probably identified that a dispute is expected if agreement cannot be reached. Thank-fully this means that they can talk turkey and if they fail we can all go through the pantomime of, for example, a consultation process and so on before litigation starts!
The law should - and it seems, does - encourage employers and employees to resolve their differences early, but the very turbulence in the cases coming through the courts are a reason for caution.
As in life, if you are really sure what you are doing, use the without prejudice approach and by all means resolve your problems early and amicably. Otherwise, as my grandmother would say, a still tongue denotes a wise head.
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Darren Clayton is partner of Doyle Clayton Solicitors based in London and Reading. Doyle Clayton specialises in employment law and acts for a wide range of employers. If you require any further information go to the website in the right hand column or contact Darren Clayton on 020 7329 9090 or by emailing dclayton@doyleclayton.co.uk