The Employment Appeal Tribunal has recently made a decision that is a useful reminder about the importance of the wording within without prejudice correspondence and settlement proposals.

Within Meaker v Cyxtera Technology UK Ltd the employer sent a letter to their employee headed “without prejudice” which stated amongst other things that their final date of employment would be 7 February 2020 and that they will be provided with a payment in lieu of notice. In addition to this they were providing an ex-gratia payment as compensation.

No settlement agreement was signed and a payment in lieu of notice was made on 14 February 2020.

The employee brought a claim for unfair dismissal stating that he had been dismissed on 14 February 2020. The tribunal held that his employment terminated on 7 February 2020 and the EAT later agreed with this position finding that:

• The terms of the letter had been considered by the tribunal to be clear and unambiguous communication of termination on 7 February 2020.
• Notwithstanding that the letter was headed “without prejudice”, the first part of the letter was deemed to be an open communication confirming the termination of employment on 7 February 2020. The termination of employment was not conditional on signing a settlement agreement and therefore was an effective termination even without reaching an agreement.

On this occasion it was advantageous to the employer to argue that it was a termination letter as it made the claim out of time, however, should it have been brought in time it is unlikely that they would wish to argue this position. This is because it is unlikely that the letter was originally intended as a dismissal letter, but rather an option for the employee to choose alongside signing the agreement. This may have resulted in an unfair dismissal claim for a clear lack of process considering no agreement was made.

What does this mean for me?

It is a clear reminder that any proposal for settlement or without prejudice correspondence is not as “safe” as it can sometimes be considered to be. It is always recommended that any such correspondence is reviewed or drafted by a professional to ensure there are no unintentional or unexpected outcomes.

If you are considering making proposals of settlement but are unsure on the best wording to use or how to enter into these conversations then please contact us at [email protected] or call 0333 888 1360 to speak to one of our professional advisors.

For advice or for a free assessment contact us today