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For the sake of argument – EAT reviews without prejudice rules (UK)
Friday, December 30, 2022

Christmas being a season of peace on Earth and goodwill to all men, so they say despite all the evidence, here is a quick festive look at just how confrontational things have to become in order to constitute a dispute at law.

The question is a surprisingly important one, since on the existence of a dispute hangs the availability of the without prejudice regime.  If you make an off-the-record proposal to an employee to resolve something which hasn’t yet graduated to that level, you may suddenly find yourself very much on-the-record, with a serious amount of egg on face and a good deal of explaining to do.

Garrod – v – Riverstone Management Limited in the Employment Appeal Tribunal this month has given this question its latest airing and produced some potentially helpful pointers to employers considering the use of a without prejudice approach to cut through their issues with a particular employee.  In brief, Mrs Garrod raised a grievance in relation to her treatment following her return from maternity leave, was offered a significant sum if she wished to leave on terms, rejected it, resigned following the dismissal of her grievance and then made a claim to the Employment Tribunal which included mention of that offer.  Riverstone said that it was without prejudice and so reference to the offer should be removed from the claim, while Garrod denied that there had been a dispute and alternatively took the view that the employer’s conduct in the course of the offer discussion constituted “manifest impropriety” (conduct so egregious that you can’t keep it under the without prejudice blanket) and so should be allowed to keep it in.

Towards the end of the judgement you can catch the EAT wondering who on the facts of this case would really care anyway, but obviously the dispute point is an important one in principle and so it was given a fairly rigorous legal once-over.

It was agreed that prior to the offer meeting, Garrod had raised a grievance about the treatment she had received.  Instinctively you would say that a grievance is more or less synonymous with a dispute, but the EAT disagreed – too simplistic a view, it said, quoting the definite without prejudice case, BNP Paribas -v- Mezzotero in 2004.  There the Judge said:

I do not consider that the act of raising a grievance by itself means that the parties to an employment relationship are necessarily in dispute.  Grievance procedures are well recognised and well used in the workplace.  They provide a mechanism whereby an employee who is aggrieved about a particular matter can raise it through appropriate internal channels.  It may be upheld, or alternatively dismissed for reasons which the employee finds acceptable, so that the parties never reach the stage where they could properly be said to be “in dispute”

We acted successfully for Ms Mezzotero in that case and so obviously took no exception to that proposition at the time.  However, seen objectively, the disconnect between grievance and dispute could pose some difficulty for an employer.  Linguistically the Mezzotero proposition makes sense – you can’t have a dispute all by yourself.  Even if you are outstandingly ill-tempered, aggrieved or petulant, it takes two to argue. But does that mean that employer and employee must drag themselves through the potentially hostile and damaging grievance process before they know whether they have properly fallen out and so before either side can safely make a without prejudice proposal to resolve the matter?  [This might seem like a good opportunity for a protected conversation as this does not require a pre-existing dispute, but those conversations are really only safe in relation to ordinary unfair dismissal and so would be a serious hostage to fortune for the employer where, as in Garrod, there had been allegations of discrimination.] However, note the word “necessarily” in the extract above and that a dispute can arise in the space between a grievance and actual legal proceedings if the parties could reasonably consider that ligation would ensue if they could not agree.

So the EAT faced two questions:

  1. were there any factors which turned Garrod’s grievance into a dispute despite the Mezzotero decision above; and

  2. did anything said or done by Riverstone in making the WP offer amount to unambiguous impropriety?

On the first question, the EAT agreed that the basic facts of Garrod were very similar to Mezzotero – employee returns from maternity leave, complains about discriminatory treatment and is offered money to go away.  However, in Ms Mezzotero’s case it was the making of the offer which to a large extent formed the basis of her claim, whereas in Garrod, the proceedings were brought in relation to the pre-existing allegations of discriminatory treatment and the offer meeting itself was not relied upon as a separate ground for complaint.  In addition, there were plentiful references in Garrod’s grievance and her correspondence around it which could reasonably lead the reader to conclude that if the grievance were not resolved to her satisfaction, litigation was a distinct possibility  -she made multiple references to breaches of specific legal rights, mentioned a referral to ACAS for early conciliation, and so on. There were therefore good grounds to distinguish her case from Mezzotero and to hold that there was indeed a dispute for WP purposes.

As to the unambiguous impropriety argument, the ET rejected all Garrod’s evidence as to how the offer meeting had been conducted.  That included her suggestion that Riverstone’s representative had been guilty of “trickery, perjury and dishonesty”, that he had told her husband in the meeting to “shut up” and that neither of the Garrods had known what “without prejudice” meant, the last being a contention fatally undermined by both of them having a law degree, Garrod herself having taken the Legal Practice Course and her husband having a PHD in Law.  She also said at the hearing that her husband had taken notes at the offer meeting which would support their version of events, but oddly failed to mention those notes until the hearing itself, and then “could not find them”. 

So some lessons for employers:-

  1. Don’t assume that a grievance is necessarily a dispute for without prejudice purposes. The more aggressive the tone of it, the greater the references to legal process or statutory provisions or lawyers in it, the higher the stakes for the employee’s position, the greater the realistic scope for litigation if no agreement is reached, the failure of earlier informal attempts of resolution, etc., should all be considered first.

  2. One of Garrod’s complaints about the conduct of the offer meeting was that Riverstone’s representative had turned up with a draft settlement agreement already prepared, indicating as she saw it a degree of predetermination that she had no future in the business.  The Employment Tribunal found that in fact, there had been no draft settlement agreement, but even if there had been, is there anything in the provision of a draft agreement at an offer meeting which would constitute unambiguous impropriety? If clearly marked as “draft”, expressly for information only, definitely not already signed by the employer, and with written encouragement to show it to a legal advisor, the provision of something in writing at an offer meeting may actively help the employee understand what is and is not being proposed, and in particular, that they have not actually been dismissed, nor any decision made to that effect.  However gently broken, the psychological shock of knowing that your employer would be happy to see you go is essentially the same whether done under the without prejudice umbrella or not.  As soon as that question is raised, therefore, there is a real risk that the employee will hear nothing further of your conversation, their mind instead a whirl of panic around the bills, the mortgage, the future, anger and fear.  Something immediately available in writing can really help clarify that the employee is still in control of their own next move.

  3. This case reinforced the principle that “unambiguous impropriety” has to be pretty material before it can be used to pull off the WP blanket.  Case law refers to perjury, blackmail and discrimination as possible examples. That will not include a good faith expression of concern about whether a grievance will succeed or whether the necessary workplace relationships can be repaired in the employee’s eyes.  However, it is likely to include overt threats of imminent dismissal without due process if the offer is not accepted and any suggestion that it is the employer which cannot get itself emotionally past any allegations of discrimination which have been made, since that would clearly be victimisation.

  4. To defend against Garrod-like allegations of impropriety in the without prejudice meeting, should you record it? Take brief notes by all means, but there is something cosmetically very uncomfortable around making a record of something which is expressively off the record, so this could not be advised.

If you are a subscriber to this blog, our sincere thanks for your time over 2022. We are very pleased to have you with us.  If you are not a subscriber, we would encourage you to give it a go (what have you got to lose?),  but either way, my best wishes for the New Year to all our readers.

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