Publish date

31 January 2023

Does an employee’s grievance alleging bullying, harassment and maternity discrimination constitute an ‘existing dispute’ for the purpose of the ‘without prejudice’ rule? 

The recent decision in the case of Garrod v Riverstone Management Ltd states that it does. The Employment Appeal Tribunal (EAT) upheld the Employment Tribunals (ET) ruling that an offer of a settlement agreement to an employee before legal proceedings have commenced was within the scope of “without prejudice” privilege.  This meant that evidence of a settlement offer made at a meeting about a grievance could not be relied in subsequent tribunal proceedings.

Garrod v Riverstone Management Ltd

Mrs Garrod was employed by the Respondent as Company Secretary. She was on maternity leave until 15 July 2019, following this she informed the Respondent that she was pregnant with a second child on 17 October 2019. Mrs Garrod then went off on sick with feeling depressed and anxious between 18 to 30 October. Upon her return, she submitted a grievance raising serious allegations against three managers. This complaint included mistreatment and pregnancy and maternity discrimination, including bullying from her manager for nearly 5 years, harassment by her manager and a breach of her legal rights.

An HR and employment law adviser to the company sent an email to Mrs Garrod proposing a meeting for a ‘preliminary discussion’. Mrs Garrod was offered £500 plus VAT to speak with her own legal advisor.

Mrs Garrod and her husband attended a meeting at a local golf club on 8 November 2019. Mrs Garrod decided to not have a legal adviser present. This may be because both the Claimant and her husband have degrees in law, including a PHD for her husband.

Initially the Respondent’s legal adviser and Mrs Garrod discussed her grievance.  The legal adviser then said that he would like to have a without prejudice conversation, assuming that the Claimant understood the meaning.  She did not ask for clarity. During this conversation, the sum of £80,000 was offered to terminate the employment.

No agreement was reached.  The Respondent went on to reject the grievance and Mrs Garrod resigned, bringing claims for discrimination and constructive dismissal.  In her claim she referred to the meeting on 8 November 2019.  The Respondent argued that reference to the meeting should be excluded as the meeting was without prejudice.

The ET found that the Claimant did understand the definition and implications of a without prejudice conversation, whilst accepting that that she was taken by surprised and felt ambushed.

However the ET held that the without prejudice rule applied to the settlement offer made at the 8 November meeting.  The Claimant appealed, including on the basis that the unambiguous impropriety exception to the without prejudice rule should apply.  This can apply where the without prejudice rule is being used to cover up conduct such as perjury or blackmail.

The decision under appeal

The EAT agreed that there was an existing dispute ongoing at the time of the preliminary discussion meeting on 8 November 2019 and there was a chance of potential litigation if no agreement was reached at this meeting, or follow up meetings. Crucially, the claimant mentioned using ACAS mediation or the early conciliation process if the matter could not be resolved “in-house”.

Furthermore, the argument put forward by the Claimant that Mr Sherrard, the legal adviser, was rude, overbearing and aggressive was dismissed,  such that the unambiguous impropriety exception did not apply.

The EAT found that Mrs Garrod was running an untruthful case as they believed she knew the correct meaning of without prejudice and as a result ordered costs and fixed the sum at £3,400.

Key points for employers

–    The references to ACAS and to Early Conciliation can be considered a clear reference to possible litigation and therefore a dispute.
–    If an employee is legally trained, it is reasonable to assume that they meant what they said when referencing legal terminology.
–    Employers should still be careful to not assume that a grievance means an automatic dispute and the facts are still a crucial decider to this. However, it is a helpful decision for employers moving forward.

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