In the recent case of Meaker V Cyxtera 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.
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.
For assistance on Settlement Agreements and without prejudice conversations please contact me.