‘Without Prejudice' Protection May Apply To Exit Discussions In Response To A Grievance

The EAT ruling in Garrod v Riverstone Management Ltd provides welcome reassurance that an employer can initiate ‘without prejudice' discussions offering a possible consensual termination where an employee has raised a grievance clearly indicating potential legal claims.

‘Without prejudice' protection can only apply to communications which are a genuine attempt to settle an ‘existing dispute'.  It had been suggested that the earlier case of Mezzoterro  established a rule of law that a grievance by itself cannot amount to an ‘existing dispute'.  The EAT in Garrod  clearly rejected this contention.  It clarified that a grievance can be evidence of a dispute, although it will not always be – this will depend on the facts.