Last reviewed 3 April 2019

Stuart Chamberlain, author and senior employment consultant at Croner-i, sheds light on the terms and their implications. He also provides some advice to employers on these issues.

Employers will sometimes wish to solve a difficult problem or relationship with an employee swiftly by a negotiated exit on agreed terms. Such negotiations are often conducted under the protection of “without prejudice” documentation and discussions. Unfortunately, the protection offered by this “without prejudice” label is not absolute and the content of the discussions or letters may come back to haunt the employer by not being protected in any subsequent court or tribunal proceedings.

There is often some confusion between the understanding and use of “without prejudice” and “protected conversations”. Many employers are familiar with the concepts as a means to facilitate exit negotiations with employees, but both terms are frequently used incorrectly. A “protected conversation” is not the same as a “without prejudice” conversation.

Without a full appreciation of their advantages and their limitations employers can unwittingly use the wrong terms and leave themselves exposed to claims.

The “without prejudice” rule

“Without prejudice” is a principle of common law — that is, derived from case law. “Without prejudice “communications can be made orally or in writing. Its purpose is to encourage parties to settle the dispute out of court by permitting them to speak frankly and freely during settlement discussions.

If there is an existing dispute and both parties are willing to hold discussions to attempt a settlement, the content of these discussions or relevant documents can be labelled as “without prejudice” and cannot be subsequently disclosed at a tribunal — they are genuinely “off-the-record”. There will clearly be a dispute, for example where the employer has announced an intention to dismiss for gross misconduct and then discussed with the employee alternative methods of dismissal.

There are a number of other important features of the “without prejudice” rule.

  • There must be a genuine attempt to reach settlement of a dispute; a mere statement or assertion of facts will not engage its protection.

  • Both parties must agree to treat the discussions as “without prejudice”.

  • Case law has established that the crucial consideration is whether, in the course of negotiations, the parties contemplated or might reasonably have contemplated litigation if they could not agree.

  • However, the protection is not absolute. It will be lost if there is “unambiguous impropriety” on the part of either party — that is, perjury or blackmail, or an abuse of a privileged position.

  • The “without prejudice” rule can apply even if this label has not been applied to it. Indeed, once there are negotiations, such negotiations will be connected to a dispute and the “without prejudice” rule will apply.

  • An employer cannot pick or choose when the “without prejudice” rules apply — for example, the employer cannot rely on parts of a “without prejudice” discussion and at the same time use these very rules as a shield to protect itself.

  • All negotiations conducted through Acas are without prejudice and confidential.

  • If there is a dispute, however, about the effective date of termination (EDT) in pre-termination discussions, then the content of these discussions may be admissible in evidence to determine the date of termination. Where the EDT is agreed, then all evidence of pre-termination negotiations should be excluded.

“Protected conversations”

“Protected conversations” are a statutory scheme — under s.111A of ERA (as inserted by s.23 of the Enterprise and Regulatory Reform Act 2013). They are used in discussions towards a settlement agreement. They offer similar protection to the “without prejudice” principle but, unlike this rule, these “protected conversations” can apply where there is no existing employment dispute. They can sometimes, therefore, appear “out of the blue”.

They can be proposed by both employers and employees, although they will usually be proposed by the employer. They allow an employer to hold a protected conversation with the employee with the fact and content of these discussions being protected. In short, the employer will pay the employee a sum of money to leave their job and not bring a claim against the employer at the tribunal. The employer may also be willing to provide a reference.

However, there are considerable limitations on the use of “protected conversations”, as follows.

  • The protection only applies to in unfair dismissal claims.

  • It does not apply to other claims — such as discrimination, wrongful dismissal or the unlawful deduction of wages.

  • Nor does not apply to claims of automatically unfair dismissals — such as whistleblowing and dismissal on grounds of trade union membership.

  • The protection cannot be waived even if the parties agree to the waiver, unless there is “improper behaviour”. The revised Acas Guidance on Settlement Agreements (December 2018) defines “improper behaviour” as something that would constitute “unambiguous impropriety” under the “without prejudice principle”. What constitutes “improper behaviour” will be for the employment tribunal to decide on the facts, but examples include: harassment, bullying and intimidation, physical assault or the threat of it, discrimination and putting undue pressure on the party.

  • Employees are usually given 10 days to consider the offer and to seek legal advice (often paid for by the employer).

  • An employee may not rely on such a settlement offer as a reason to resign and claim constructive dismissal.

  • The “protected conversation” principle does not apply in Northern Ireland.

Advice to employers

  • Employers should be aware of the differences between the common law “without prejudice” rule or principle and the statutory “protected conversations” and when they can both be properly used. It could be expensive to get it wrong.

  • Ensure that correspondence intended to attract “without prejudice” is labelled as such and make clear the oral communications that are to be so labelled.

  • It could be foolhardy to rely on such a complex rule of evidence, which only applies in limited circumstances.

  • Employers should note that it will not be enough simply to label a document “without prejudice” and avoid later disclosure. The protection only applies where the document conforms to the legal rules: there is an existing dispute between the parties. And the privilege will be removed if there is any “unambiguous impropriety”.

  • An offer made “without prejudice save as to costs” can be a useful tactical device in some circumstances to put pressure on the other party. It can be put to the court in order to assist in a decision on costs. This correspondence cannot be disclosed for any other purpose and will be protected until the court or tribunal considers the issue of costs

  • The case law on “without prejudice” discussions is not applicable to “protected conversations”


A “protected conversation” under s.111A of ERA 1996 runs beside the “without prejudice” rule. The latter will continue to apply where there is a dispute between the parties and their written and oral communications are a genuine attempt to resolve the dispute.

If in doubt, an employer should always seek legal advice.