Settlements in Employment Law – are Settlement Proposals admissible in evidence of unfair or constructive dismissal?

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In the recent case of Harrison v Aryman Ltd, the Employment Appeals Tribunal considered how far a tribunal has to go in considering exceptions to the general principle that pre-termination negotiations are inadmissible as evidence and considered that very same question.

In this case, an employee resigned in July 2017, claiming unfair constructive dismissal, sex discrimination, and pregnancy and maternity discrimination. Her claim referred to a letter of August 2016 which was headed “confidential settlement proposal”, which she said indicated an intention to bring her employment to an end. The employer argued that she was not entitled to rely on the letter in support of her claim because it formed part of the pre-termination negotiations and was inadmissible. At a preliminary hearing, the Employment Tribunal agreed and found that the employee could not rely on the letter to support her unfair dismissal claim, although it was admissible in the discrimination claim.

The employee appealed which was upheld. Although both parties accepted at the preliminary hearing that the letter was evidence of pre-termination negotiations, this was not the end of the matter. The Employment Tribunal should have considered whether either of the exceptions to the normal principle of inadmissibility applied, even though the employee had not expressly raised those arguments. 

She was in effect claiming that she had been automatically unfairly dismissed because of pregnancy or maternity, even though she had not expressly pleaded her case in that way. She had also referred to the employer’s “improper behaviour”. Those factors meant that the Tribunal should have engaged proactively with the exceptions to the normal inadmissibility principle and decided whether an exception applied. It was an error of law not to do so and the issue was returned to the tribunal for further consideration. 

The moral of the story is to be careful when seeking to negotiate settlements with staff and to seek legal advice before doing so.

For further advice on negotiated settlements, dismissing employees or any other area of employment law, why not contact one of Alexander JLO’s leading experts in the field and see what we can do for you?

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