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‘Without prejudice’ protection may apply to exit discussions in response to a grievance

In the case of Garrod v Riverstone Management Ltd the EAT has held that a settlement offer made to an employee after she had complained about discrimination, but before she had started legal proceedings, was genuinely without prejudice and not unambiguously improper.  As a result, the employee was unable to refer to the settlement offer in her legal claim.

In the case of Garrod v Riverstone Management Ltd the EAT has held that a settlement offer made to an employee after she had complained about discrimination, but before she had started legal proceedings, was genuinely without prejudice and not unambiguously improper.  As a result, the employee was unable to refer to the settlement offer in her legal claim.

Ms Garrod was employed by Riverstone Management Ltd as its Company Secretary.  She returned from maternity leave on 15 July 2019 and three months later, on 17 October 2019, she told her manager that she was pregnant with her second child.  On 30 October 2019 she raised a grievance complaining of mistreatment, pregnancy and maternity discrimination and of bullying and harassment by her manager for almost five years.

A week later she was invited to attend a meeting with, Mr Sherrard, an HR and employment law adviser, for a “preliminary discussion”. After a general discussion about her grievance, Mr Sherrard said he would like to have a “without prejudice” discussion. The company wished to make an offer to terminate her employment and he put forward the figure of £80,000.  Ms Garrod felt ambushed by this part of the meeting and began to cry.

No agreement was reached. Instead, the grievance hearing went ahead, and the grievance was rejected in its entirety. Her grievance appeal was also rejected and Ms Garrod resigned and later alleged that she had been constructively unfairly dismissed. In her claim before the Employment Tribunal, Ms Garrod made reference to the without prejudice meeting with Mr Sherrard.  Riverstone applied to the Tribunal to have those references removed on the basis that this was a privileged meeting.

The Employment Tribunal Judge agreed that the “without prejudice” rule had been engaged because there was an existing dispute between the parties and the communications made at the meeting were part of a genuine attempt to settle that dispute. Even though litigation had not started by this point, the Judge agreed that the parties had (or might reasonably have) contemplated that litigation would follow if there was no settlement.  Finally, the Judge did not accept that the rule should be disapplied on the basis of any “unambiguous impropriety”.  Therefore, the Judge allowed the application and ordered that the references to the meeting should be removed from Ms Garrod’s claim.  Ms Garrod appealed.

Ms Garrod argued that the Employment Tribunal Judge had been wrong to find that there was an existing dispute between the parties which engaged the without prejudice rule. The EAT rejected this ground of appeal. In this case, the Tribunal Judge was entitled to conclude that the dispute was already in existence at the time she raised her grievance and at the time of the meeting.

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