Employment and pensions

UK Employment Law Coffee Break: Holiday entitlement, our next employment law webinar and whether grievances are disputes

Published on 19th Jan 2023

Welcome to our latest Coffee Break in which we look at legal and practical developments impacting employers

Government publishes consultation on holiday entitlement for irregular hours, agency and part-year workers

Holiday entitlement remains a complicated area for irregular hours, agency and part-year workers. Last year's Supreme Court decision in Harpur Trust v Brazel left employers engaging on this basis potentially having to pay more holiday pay for "part-year" and "irregular hours" workers than for normal employees working the same aggregate number hours – and some now face the possibility of retrospective liability even where they followed Acas guidance. The government has published a consultation on proposed changes to the statutory regime for calculating holiday entitlement for part-year and irregular hours workers to ensure it "is proportionate to the time they spend working". If implemented, this would effectively reverse the effects of Brazel.

Read the latest Insight from our employment and workforce solutions teams on what this means.

Employment law challenges in 2023: Practical considerations for HR

Last week we looked at the challenges we are seeing for employers in 2023 and our first webinar this year will provide a practical run through of these, looking at the latest significant case law and government proposals affecting day-to-day employment practices and what steps you should take to manage legal risk. Key topics we will cover include redundancies and restructurings, hybrid and flexible working, and diversity and wellbeing.

The webinar will take place on Wednesday 8 February between 9.30 and 10.30am. An invitation will be sent shortly, but in the meantime please do hold the date in your diary.

Was a grievance an 'existing dispute' for the purposes of the 'without prejudice' rule?

The public policy objective of encouraging litigants to settle their disputes by agreement rather than through litigation enables parties to enter into "without prejudice" communications; these communications are privileged from disclosure and inadmissible in evidence. However, to be without prejudice there must be an existing dispute between the parties (although litigation need not necessarily have commenced), the communication must be a genuine attempt to settle that dispute and the exclusion of the evidence would not "act as a cloak for perjury, blackmail or other unambiguous impropriety".  

In some scenarios the existence of an existing dispute will be evident from the facts; in others it can be tricky to ascertain – for example, does simply raising a grievance mean an employee has entered into a dispute with their employer?

The Employment Appeal Tribunal (EAT) has previously stated in the Mezzoterro case that it did not consider that the "act of raising a grievance by itself means that the parties to an employment relationship are necessarily in dispute. Grievance procedures are well recognised and well used in the workplace. They provide a mechanism whereby an employee who is aggrieved about a particular matter can raise it through appropriate internal channels. It may be upheld or alternatively dismissed for reasons which the employee finds acceptable, so that the parties never reach the state where they could properly be said to be 'in dispute'".

In a recent case before the EAT, a claimant sought to rely on this when asserting that a without prejudice discussion, which had taken place in the context of a grievance, should be admitted in evidence in subsequent tribunal proceedings.

Her grievance raised "serious allegations" against three senior managers relating to "mistreatment and pregnancy and maternity discrimination including bullying.. harassment and a breach of her legal rights". She had attended a preliminary meeting prior to the formal hearing of her grievance at which the HR representative at her employer stated he was speaking "without prejudice" and described the employment relationship as "fractured" and "problematic" and that the employer would like to make an offer to terminate her employment, with a sum of £80,000 mentioned.

However, the EAT in this case held that the discussion between the HR representative and the claimant did attract without prejudice status and should not therefore be admitted in evidence. It agreed with the tribunal that her grievance indicated a dispute was in existence; she had referred expressly to "using Acas mediation or the early conciliation process if the matter could not be resolved in-house" which were "clear signposts" to the possibility of future litigation.

The tribunal also found that the employer's proposal was part of negotiations "genuinely aimed at settlement of the dispute" noting "there is nothing unusual about an employment dispute being settled by an agreement for termination of employment on financial terms". The exception for unambiguous impropriety did not apply; the tribunal found that the HR representative had not been "anything other than polite and professional" and the without prejudice rule will be disapplied only in "the very clearest of cases" or "in truly exceptional and needy circumstances".

The claimant had sought to argue that her case was "virtually indistinguishable" from Mezzoterro, where a similar settlement discussion instigated by an employer following an employee's submission of a grievance on a return from maternity leave was admitted in evidence despite the employer alleging it was without prejudice. However, the EAT here draw a distinction, noting that Mezzoterro was an "unusual case" in which the alleged unlawful conduct that founded the actual tribunal claim was said to have occurred at the allegedly privileged meeting, meaning that if the evidence could not be permitted the claim could not be pursued. Consequently, on the facts of the Mezzoterro case, the tribunal had been entitled to find at the time of the discussion there was a lack of a dispute and a lack of a genuine attempt at settlement. In contrast, the tribunal in the present case considered that the reference the claimant had made to the without prejudice discussion was simply "part of a narrative making the point that [her] grievance was not dealt with her to her satisfaction" and indeed "may have been intended to show that the [employer] thought that it had a weak case".

While this case is a helpful decision for employers in confirming that a grievance can be a dispute for the purposes of attracting without prejudice protection, caution must continue to be exercised as it is clear that each case will turn on its facts in ascertaining whether there is an existing dispute.

Where there is no existing dispute, an employer may instead seek to rely on the statutory pre-termination negotiation provisions which will protect "off the record" conversations from subsequent disclosure, but it must be remembered that this only applies to ordinary unfair dismissal claims. Where a communication does attract without prejudice privilege, the EAT was clear that the rule can be displaced "only by very clear and very serious wrongdoing" and that "making a settlement offer which could, on one view, provide a clue to a party's discriminatory attitudes falls far below that threshold".

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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