Is that ‘off the record’? How effective are “Without Prejudice” Letters

The recent case of Meaker v Cyxtera Technology UK Ltd, has shown how a dismissal can be effective, even if it is communicated via a “without prejudice” letter. Whilst the case did not go in the employee’s favour, employers should heed the warning given and apply caution about the content of without prejudice letters, in light of this decision.

Facts

Mr Meaker was employed by CTUK in a heavy manual night role. Following an injury in 2018 he took an extended period off work. It was agreed that because of his injury, his ability to carry out his duties was likely to be limited on a permanent basis. There was a conversation with the HR Manager at CTUK in which it was stated that the Company was considering terminating Mr Meaker’s employment and the possibility of a settlement agreement was discussed. In January 2020, Mr Meaker spoke with the HR Manager at CTUK and believed that further enquiries would be made about the possibility of alternative roles for him to carry out but the manager clarified that this would not happen.

CTUK then sent Mr Meaker a letter on 5 February 2020, received on 7 February 2020, headed “without prejudice”. The letter stated that there had been a mutual agreement to terminate Mr Meaker’s employment. It stated that Mr Meaker’s last day of employment would be 7 February 2020 and he would be sent his P45. The letter also offered an ex-gratia payment in addition to Mr Meaker’s contractual payments, which would be paid provided Mr Meaker signed a settlement agreement, which was also enclosed. Mr Meaker received a payment from CTUK on 14 February 2020 which reflected his payment in lieu of notice and outstanding holiday. On 19 June, Mr Meaker brought a claim for unfair dismissal.

The Employment Tribunal considered if Mr Meaker brought his claim in time. The Tribunal found that the letter from 5 February, received on 7 February was a letter of dismissal and was effective on the date it was received. The Tribunal held that Mr Meaker brought his claim more than 3 months and was out of time. Mr Meaker appealed to the Employment Appeal Tribunal (EAT).

Employment Appeal Tribunal (EAT) Decision

The EAT dismissed the appeal and held that where an employee is dismissed summarily, the EDT is the date of the dismissal, even if the dismissal is one which is carried out in breach of contract. The EAT considered that the letter from 5 February communicated CTUK’s clear decision to dismiss. Mr Meaker attempted to argue that the letter was not clear as it was marked “without prejudice” and included a draft settlement agreement for mutual termination which had not been agreed. Interestingly, the EAT rejected this argument.

The EAT stated that the letter, read as a whole and given the circumstances, was sufficiently clear that it was terminating Mr Meaker’s employment unilaterally.

The EAT stated that the letter had not been sent out of the blue as it had been agreed Mr Meaker could not return to his role and termination had already been discussed with him. The EAT considered that even though the letter was headed “without prejudice”, it was entitled to read it as having two parts. One dealing with termination and payments arising from this, and the other making a proposal for a further payment if Mr Meaker signed a settlement agreement. The EAT stated that the letter wrongly stated that the termination was by mutual agreement and gave clear instructions as to the last date of employment and it was not contingent on anything else happening. Therefore, Mr Meaker was unable to proceed with his claim as it was out of time.

Conclusion

This case illustrates that employers will need to be particularly careful when communicating via “without prejudice” correspondence. This banner will not always give full protection and mean that it will not be disclosable in subsequent tribunal claims. The case also clarifies that any communication as to dismissal needs to be sufficiently clear in order to be effective. The EAT did not consider whether the dismissal was fair in this case as the claim was out of time. However, employers should ensure such communication is clear and not dependent on other circumstances otherwise it may not be an effective dismissal.