EAT clarifies approach to “without prejudice” discussions

The Employment Appeal Tribunal has provided important guidance on the scope of the “without prejudice” rule in employment disputes in Garrod v Riverstone Management Ltd.

The claimant had been invited to what was described as an informal meeting to discuss her future with the business. During that meeting, concerns about performance were raised and the possibility of termination was discussed. The employer later sought to rely on aspects of that conversation in defending an unfair dismissal claim, arguing that the discussion was not genuinely part of settlement negotiations.

The EAT rejected that argument, confirming that the protection afforded by the without prejudice rule depends on substance rather than labels. Where a conversation is aimed at resolving a dispute or avoiding litigation, it will generally attract protection, even if no formal claim has yet been issued. The tribunal should be slow to allow cherry-picking of such discussions.

For employers, the decision is a reminder to exercise care when initiating “off the record” conversations. Clear framing, consistency and an understanding of the legal consequences remain essential when discussing exits or settlement options.