An employer who has been involved in an employment dispute that proceeded to a negotiation stage, they might have received letters or emails marked “without prejudice’’. Often “without prejudice” conversations are used to settle employment disputes.
In this quick reference guide for employers, we discuss the implications of “without prejudice” and the situations in which the employer can use the term.
Please note that the information provided below is general in nature and does not constitute legal advice. Should the employer need help in legal matters, they should consult a lawyer or a legal professional.
Legal background
The Evidence Act 2006 outlines the concept of 'without prejudice' by providing for the confidentiality of communications that take place to try to resolve a dispute. This is a crucial protection as it allows for free, transparent, and frank exchange of information while resolving a dispute.
“Without prejudice” discussions
“Without prejudice” is a legal term used to describe written or verbal communications aimed at settling disputes and such communications cannot later be used as evidence in the Employment Relations Authority (ERA) or Employment Court. Under certain circumstances “without prejudice” conversations are privileged and treated as confidential and hence are inadmissible as evidence in legal proceedings.
Importance of “Without prejudice”
Due to the protection that comes with discussing a dispute on a “without prejudice” basis, parties are encouraged to speak openly, candidly and to make offers to settle disputes. “Without Prejudice” mitigates the risk that their conversations or correspondence will later be used against them should discussions be ineffective in settling the dispute or problem.
“Without prejudice” and law
Generally, any statement, document or action pertaining to a dispute can become evidence in a legal claim. If the dispute proceeds to the ERA or Employment Court, the employer should expect that most of the relevant communications pertaining to the dispute will be admitted to the court to help them make decisions regarding the outcome.
However, the law recognises ‘privilege’ for communications that specifically seek to resolve a dispute (i.e. “without prejudice” communications). Which means that such communications cannot be used in court as evidence against the party that made them if they occur in a genuine attempt to settle a dispute.
Normal discussions
Normal or ‘open’ discussions are discussions and correspondence that are “on the record” and can be admissible in any legal proceedings. Normal or open discussions include the things the employer or employee does, writes, or says during a legal dispute and may later act as evidence of either parties, intentions representations and potential liability.
Exceptions to “Without prejudice”
There are a few exceptions to “without prejudice” being privileged and confidential.
If the conversation contains information for a dishonest purpose or enables a criminal offense, then the “without prejudice” privilege may not apply. This exception includes any communication made or received or information compiled dishonestly or criminally. Basically, an employer cannot hide any criminal activity using “without prejudice” as a shield.
Other exceptions include:
- The information contains necessary evidence to prove the defence.
- The information is of ‘unambiguous impropriety’ where one party has blatantly or unmistakably abused the privilege.
- The information is misleading or misrepresented.
- It is in the best interests of the public to release the information, for example where it is a serious threat to public safety.
- The information is not related to the dispute.
“Without Prejudice” in the workplace
Simply labelling a conversation, letter or email “without prejudice” may not be sufficient to privilege the employer’s communications. Privilege only applies to the employer communications if they meet the following criteria:
- Made in connection with an attempt to settle or mediate the dispute.
- Intended to be confidential.
In a professional setting, “without prejudice” conversations are typically used to settle workplace disputes.
Employers and employees will often hold “without prejudice “conversations, allowing both parties to negotiate and mitigates the risk of the discussion later being referred to in a personal grievance.
Example of “Without Prejudice” in the workplace
“Without prejudice” conversations often take place between an employer and employee while a settlement agreement is being negotiated.
A settlement agreement is used when both parties mutually agree to end an employment contract. Having discussions “without prejudice” allows both parties to suggest the terms of the agreement, which normally focuses on financial compensation. These agreements are referred to as a “Record of Settlement” or “Deed of Release”
Using “Without prejudice”
Both written and oral communications can be classified as “without prejudice”. You must label written correspondence clearly to ensure it is without prejudice. This can be simply writing 'WITHOUT PREJUDICE' at the top of a letter.
For employers, it is recommended to keep without prejudice correspondence separate from open corresponndence. To give you an example, lawyers will often send out two letters around the same time:
- the first is an open letter setting out their legal position and demands
- the second is a 'without prejudice' letter, setting out a proposal
If the recipient agrees to the terms of the settlement proposal, then the parties will have a basis for a formal resolution. If they reject it, then they will have to consider the issues raised in the open letter.
When having verbal discussions or communications, the parties involved need to clearly understand the non-prejudice nature. Sometimes lawyers will contact the opposing counsel and ask to have a without prejudice chat. If the other lawyer agrees, then they will have a open and professional discussion about the technical and legal aspects. They can offer compromises or share solutions in a genuine attempt to move towards a resolution. This discussion cannot be used later for any arguments in court.
Without prejudice save as to costs
Without prejudice save as to costs is also commonly used to label correspondence in a legal dispute. Save as to costs means that you can admit correspondence to court as evidence, but only for questions relating to costs. This happens when the court has decided on the main issue and is determining the legal costs that the unsuccessful party must pay to the winning party.
Record keeping
If the parties come to an agreement, they should put it in writing so that it becomes legally binding. The employer should also specify the exact complaint or dispute that the agreement relates to.
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Healthy workplace relations are the backbone of any successful business but sometimes can be difficult to maintain. Peninsula has years of experience in workplace relations and can help you navigate difficult situations with your employees. Contact our team to learn how we can help you.
This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.