Case update (2): Grievances and without prejudice privilege

Based on the facts of this case, the EAT decided that a grievance could amount to an ‘existing dispute’ for the purposes of the without prejudice rule.

Summary: Can a grievance can amount to an ‘existing dispute’ for the purposes of the without prejudice rule?

Yes, says the EAT in Garrod v Riverstone Management Ltd (available here), particularly where the grievance indicates the employee is prepared to bring legal claims.

Background: Communications between parties in a genuine attempt to settle an existing dispute are inadmissible in court and tribunal proceedings as they are protected by without prejudice privilege. To amount to an ‘existing dispute’ there should be signs that the employee is aggrieved to the extent that they are considering bringing a legal claim.

In BNP Paribas v Mezzoterro, the EAT said that raising a grievance does not necessarily mean that there is a dispute. (In this case the EAT allowed without prejudice discussions and settlement offer to be admitted as evidence where the employee claimed that these were acts of victimisation and discrimination resulting from her raising a grievance).

Without prejudice protection will be lost if a communication is used to hide behaviour which is obviously improper, such as dishonesty or fraud (‘unambiguous impropriety’).

Facts: The employee, Ms Garrod (who had some legal training) worked as a company secretary for her employer, Riverstone Management Ltd. She brought a grievance complaining of pregnancy and maternity discrimination in which she referred to her legal rights and Acas Early Conciliation.

A preliminary grievance meeting took place during which Mr Sherrard (an HR and employment law adviser) said he would like to put forward a ‘without prejudice’ settlement offer on behalf of the employer to resolve the dispute and agree the end of her employment. This upset Ms Garrod and she did not accept the offer.

Ms Garrod’s grievance and appeal were not upheld. She resigned and brought Tribunal claims for pregnancy and maternity discrimination and constructive unfair dismissal. She referred to the without prejudice conversation in her claim form. The employer argued that these references should be excluded from the Tribunal proceedings as they were protected by the rules on without prejudice privilege.

Tribunal decision

The Tribunal held that the without prejudice discussions were protected and should be excluded. The employee appealed to the EAT.

EAT decision

The EAT dismissed the employee’s appeal and agreed that the discussions were protected by without prejudice privilege.

The Mezzoterro decision did not mean that a grievance could never amount to a dispute and, in this case, the grievance did indicate the existence of a dispute. Ms Garrod’s grievance referred to the infringement of her legal rights, to Acas Early Conciliation and contained fundamentally the same information as her Tribunal claim. The fact that Ms Garrod was legally trained also supported her intention to litigate.

The settlement offer was genuinely aimed at resolving the dispute. In these circumstances there was nothing unusual about seeking to terminate employment on financial terms. This was the case even though Ms Garrod was upset by this and had wanted to remain in her job.

There was no improper behaviour (or ‘unambiguous impropriety’) in this or in Mr Sherrard’s behaviour – there was no evidence of his being anything but polite and professional in the meeting. In any event without prejudice protection will only be lost in ‘truly exceptional and needy circumstances’ and in the clearest of cases of unambiguous impropriety.

Implications: This is a helpful case for employers which confirms that a grievance can amount to a ‘dispute’ and be used to initiate without prejudice discussions. It should also offer some comfort to employers that they can:

Propose termination as part of a settlement offer without usually losing the protection of without prejudice privilege – even in the context of a grievance where the employee has not said they want to leave; and

Rely on the protection of without prejudice privilege except when it is very clear that they have behaved in an obviously improper manner (‘unambiguous impropriety’).

However, employers should still take care before initiating without prejudice discussions following a grievance. Whether there is an existing dispute will very much depend the content and context of the grievance.

If you are uncertain as to whether a grievance amounts to an existing dispute, it may be possible to have a ‘protected conversation’ under section 111A of the Employment Rights Act. However, this will only protect such conversations from disclosure in proceedings dealing with standard unfair dismissal claims. So if there are other factors at play which mean that the employee could bring additional claims, it may be better to wait to see if the situation does become more obviously a dispute and, if so, rely on the without prejudice rule instead.

Case update (2): Grievances and without prejudice privilege

Based on the facts of this case, the EAT decided that a grievance could amount to an ‘existing dispute’ for the purposes of the without prejudice rule.

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