Factual and Procedural Background
This opinion concerns an appeal by Company A against a decision of an Employment Tribunal at London Central permitting the Appellant to rely on statements made by the Respondents during a meeting held on 7 January 2003, which the Respondents had described as "without prejudice". The meeting followed the Appellant raising a grievance regarding her treatment after returning from two periods of maternity leave. The Appellant alleged sex discrimination and victimisation related to her employment treatment and the suggestion of termination by mutual agreement made during the meeting. The appeal was expedited due to the imminent tribunal hearing fixed for 5 April 2004.
The Appellant had been employed by the Respondents since 1996 and held a senior marketing and debt origination role. She took maternity leave twice, returning in November 2002, but soon raised a grievance complaining of being discouraged from returning to her previous role, demotion, exclusion from work activities, and unfair treatment she attributed to sex discrimination related to maternity leave.
Following the grievance, the Appellant was initially told to stay at home while the grievance was processed, then invited to return to work on 7 January 2003. On that day, she was locked out of her computer and later attended a meeting with representatives of the Respondents, where it was suggested that her employment should be terminated by mutual agreement with a redundancy package offered. The meeting was described by the Respondents as "without prejudice". The Appellant was allowed to collect her personal effects and leave, but was not formally dismissed.
The Appellant subsequently initiated proceedings before the Employment Tribunal claiming sex discrimination, victimisation, and other employment-related complaints. The Respondents argued that the "without prejudice" rule prevented the Appellant from relying on statements made during the 7 January meeting. The Employment Tribunal Chairman allowed the Appellant to refer to the meeting, prompting this appeal.
Legal Issues Presented
- Whether the "without prejudice" rule applies to exclude evidence of discussions during a meeting between the Appellant and the Respondents held on 7 January 2003 concerning the suggested termination of the Appellant's employment.
- Whether exceptions to the "without prejudice" rule permit the Appellant to rely on statements made during that meeting to support her sex discrimination and victimisation claims.
- Whether there was an extant dispute between the parties regarding termination of employment at the time of the meeting, such that the "without prejudice" rule would apply.
- Whether admitting the evidence would amount to an abuse of the "without prejudice" privilege or otherwise undermine public policy considerations.
Arguments of the Parties
Respondents' Arguments
- The entire meeting on 7 January 2003 was expressly agreed to be "without prejudice" to allow free discussions.
- The Appellant's grievance related to treatment following maternity leave, but there was an extant dispute concerning termination of employment by the meeting date.
- The Respondents' representatives offered a comprehensive settlement package including termination, which was a genuine attempt to compromise the dispute.
- The "without prejudice" rule should exclude evidence of the meeting to protect candid settlement negotiations.
- Exceptions to the rule should only apply in cases of unambiguous impropriety, which is not present here.
- The Tribunal Chairman misdirected himself by permitting the Appellant to rely on the meeting evidence, and the appeal should be allowed.
Appellant's Arguments
- The grievance raised did not relate to termination of employment but to discriminatory treatment and demotion following maternity leave.
- There was no extant dispute about termination at the time of the meeting; termination was ancillary and separate from the grievance.
- The Respondents did not produce evidence of a comprehensive settlement package encompassing all grievances.
- The "without prejudice" rule does not apply where the communication prejudices the person to whom it is addressed, as here it would prevent consideration of key evidence supporting discrimination claims.
- The employer's conduct falls within the exception of unambiguous impropriety, justifying admission of the meeting evidence.
- Excluding the evidence would severely prejudice the Appellant's ability to prove her claims of sex discrimination and victimisation.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Cutts v Head [1984] Ch 290 |
Public policy behind the "without prejudice" rule encouraging settlement negotiations without fear of statements being used as admissions. |
Used to explain the rationale of the "without prejudice" rule and its importance in settlement discussions. |
| Independent Research Services v Catterall [1993] ICR 1 |
Application of "without prejudice" rule in Employment Tribunal proceedings and exceptions involving abuse of privilege. |
Confirmed that Employment Tribunals apply the "without prejudice" rule and exceptions only in clear cases of abuse or dishonesty. |
| In re Daintrey (1893) 2 QB 116 |
Limits of "without prejudice" rule where no genuine dispute or negotiation exists; rule does not apply. |
Supported the conclusion that the "without prejudice" rule does not apply absent a genuine dispute or negotiation. |
| Rush & Tompkins Ltd v GLC [1989] 1 AC 1299 |
Scope of "without prejudice" rule and exceptions, including "unambiguous impropriety". |
Guided the court to balance public interests in settlement and full discovery; supported exceptions to the rule. |
| Unilever PLC v The Proctor & Gamble Co [2000] 1 WLR 2436 |
Wide application of "without prejudice" rule to meetings; exceptions for abuse of privilege or unambiguous impropriety. |
Illustrated the rule's strength and identified exceptions; informed court's pragmatic approach in the present case. |
| Berry Trade Ltd v Moussavi & Others [2003] EWCA Civ 715 |
Reaffirmation of strict application of exceptions to "without prejudice" privilege. |
Supported the position that exceptions apply only in very clear cases of abuse. |
| Savings & Investment Bank Ltd (In Liquidation) v Fincken [2004] 1 WLR 667 |
Emphasised the importance of protecting "without prejudice" communications except in exceptional cases of unambiguous impropriety. |
Reinforced the high threshold for exceptions to the rule. |
| Jones v Tower Boot [1997] IRLR 168 |
Recognition of the serious public interest in eradicating discrimination in employment. |
Supported the public interest in allowing evidence relevant to discrimination claims. |
| Anyanwu v South Bank Students Union and South Bank University [2001] IRLR 305 |
Fact-sensitive nature of discrimination claims requiring full consideration of all evidence. |
Emphasised the need for full evidential consideration in discrimination cases. |
Court's Reasoning and Analysis
The court began by examining the factual context, emphasizing that the tribunal had not yet heard evidence and that the factual findings were provisional for the purpose of the admissibility issue. It noted the considerable factual disputes between the parties.
The court analysed whether there was an extant dispute about termination of employment at the time of the meeting on 7 January 2003. It concluded that the grievance raised by the Appellant concerned treatment post-maternity leave and was not a dispute about termination. The termination discussion was ancillary and separate from the grievance, which was to continue independently.
The court considered the "without prejudice" rule, its public policy basis, and the exceptions recognized in case law. It reviewed authorities confirming the rule's applicability in employment tribunal proceedings and the high threshold for exceptions, especially the requirement of unambiguous impropriety to override the privilege.
Applying these principles, the court found that the Respondents had not demonstrated that the meeting was a genuine attempt to compromise a dispute about termination, nor that the "without prejudice" privilege should exclude reference to the fact that termination was proposed. The court accepted the Appellant's argument that excluding such evidence would severely prejudice her discrimination claims.
The court rejected the Respondents' submission that the Chairman misapplied the law or exercised discretion improperly, affirming the Chairman's conclusion that the "without prejudice" rule did not prevent admission of evidence concerning the termination proposal.
In the alternative, the court considered the exception for unambiguous impropriety and found the employer's conduct, as alleged, fell within this exception, justifying admission of the evidence despite the "without prejudice" designation.
The court emphasised the public interest in allowing discrimination claims to be fully heard and cautioned against permitting the "without prejudice" rule to shield discriminatory conduct from scrutiny.
Holding and Implications
The court DISMISSED the appeal by Company A.
The effect of this decision is that the Appellant is permitted to rely on the statements made during the 7 January 2003 meeting, despite the Respondents' assertion of the "without prejudice" privilege. This enables the Employment Tribunal to consider these statements as part of the Appellant's sex discrimination and victimisation claims. The decision affirms the principle that the "without prejudice" rule does not apply where there is no genuine dispute being compromised or where the privilege would shield unambiguous impropriety, especially in the context of discrimination allegations. No new precedent was set beyond the application of established principles to the facts of this case.