Employment Appeal Tribunal finds that without prejudice letter had the effect of terminating employment
In the recent case of Meaker v Cyxtera Technology UK Limited Technology UK Limited, the Employment Appeal Tribunal (EAT) found that a ‘without prejudice’ letter from an employer offering a settlement agreement amounted to an effective dismissal letter.
The without prejudice letter was sent to the employee, Mr Meaker, confirming the settlement offer and stating that his employment would terminate by reason of mutual agreement. While Mr Meaker refused the settlement payment offered, he was paid for his notice period and holiday pay shortly thereafter.
It was decided by the EAT that due to the way the letter had been drafted, it was entitled to read the letter in two distinct parts: one openly terminating Mr Meaker’s employment and the other offering a settlement payment subject to agreement.
Why is this important?
This case shows that, if a ‘without prejudice’ letter is not drafted carefully, an employer could inadvertently terminate an employee’s employment. This could then give rise to a claim of unfair dismissal from the employee, who will be entitled to rely on the letter as evidence before a Tribunal. If the letter follows settlement discussions, it will not be enough to simply mark a letter ‘without prejudice’ and refer to the termination as by mutual agreement.
It is therefore imperative that ‘without prejudice’ letters offering settlement are drafted carefully, to ensure that the without prejudice protection extends to the entire letter and not just the offer of settlement.
What should you do?
- Ensure that you are familiar with the rules governing protected conversations.
- Consider separating open and without prejudice communications to avoid any ambiguity.
- Ensure that without prejudice letters offering settlement are drafted carefully so as not to inadvertently terminate the employee’s employment.
Get in touch if you need any assistance with holding protected conversations or drafting without prejudice letters and settlement agreements.
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