A common problem employers face is dealing with employees who are off sick or in breach of contract. As the management of such issues can be onerous, employers can at times seek to circumvent the necessary processes in order to reach an amicable solution with the employee. Whilst there is nothing wrong with that per se, recent case law highlights how important it is that an employer only seeks to circumvent due process with care.

Facts

In the case of Meaker v Cyxtera Technology UK Ltd the employee held a manual role that involved heavy lifting and lone working on night shifts. Unfortunately, the employee suffered a back injury resulting in an extended period of time off work. As part of managing the period off work the employer obtained occupational health reports where it was agreed that the injuries were such that they were likely to be permanent and would impact on carrying out weight bearing work.

After receiving the reports, the employer was considering terminating the employment and the HR manager had a ‘conversation’ with the employee to discuss the ‘possibility’ and to discuss a settlement agreement. A second conversation was held where the HR manager made it clear that the employer believed that all alternate roles had been considered and exhausted and a ‘without prejudice’ letter was sent to the employee 05 February; and received 07 February, stating that the parties had mutually agreed to the termination on the grounds of capability and offered the employee an additional payment over his contractual entitlements on condition that he signed a settlement agreement. Unfortunately, there was no mutual agreement and the employee did not agree to the terms. When the offer was rejected, the employee was terminated anyway by letter dated 14 February and the employee brought ET Proceedings.

The question for the court was whether the employee was terminated by the first letter dated 07 February or by the second letter dated 14 February

Both the ET and the EAT held that the first letter could be considered by the court despite it being marked ‘without prejudice’ and that the terms of the letter were sufficiently clear that the employer had unilaterally terminated the employment contract despite the mistaken belief of agreement between the parties.

In Conclusion

Whilst in the current case the employees claim was out of time, the findings by the court that a ‘without prejudice’ letter can correctly be considered as a termination letter will have a chilling effect.

Many employers have protected conversations with employees and use ‘without prejudice’ letters to initiate pre-termination negotiations on the assumption that the contents cannot be referred to or disclosed in subsequent tribunal proceedings. The fact that the EAT in this case held that the letter could be read in two parts, and that any without prejudice markings only applied to the part concerning the proposed settlement should be noted.

It is vital going forward that care is taken to ensure such letters are not only properly drafted to ensure they have protected status and are compliant with the ACAS Code of Practice on Settlement Agreements, but that any wordings do not give rise to an unintended or premature dismissal. Any failure to do so could result in a fair disciplinary/capability process becoming not only unfair, but discriminatory.

Don’t forget, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.

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