Protected Conversation vs Without Prejudice: What’s the Difference?

Being told that a meeting is “without prejudice” or that your employer wants to have a “protected conversation” can be confusing. Both phrases are often used when an employer wants to discuss a possible settlement agreement, but they do not mean exactly the same thing.

This guide explains the difference between a protected conversation and a without prejudice conversation, when each type of protection applies, and what you should do if your employer has invited you to an “off-the-record” meeting.

What is a protected conversation?

A protected conversation is a discussion between you and your employer about ending your employment on agreed terms, usually through a settlement agreement.

The legal protection comes from section 111A of the Employment Rights Act 1996. This says that evidence of “pre-termination negotiations” is generally inadmissible in an ordinary unfair dismissal claim. In simple terms, if your employer offers you a settlement agreement during a protected conversation, you usually cannot refer to that discussion as evidence if you ever claim unfair dismissal.

The purpose is to allow employers and employees to speak openly about a possible agreed exit, without either side worrying that the conversation will automatically be used against them later.

For example, your employer might say:

“We would like to have a protected conversation with you about the possibility of ending your employment by way of a settlement agreement.”

That usually means they want to discuss a possible financial package for you to leave your employment.

To find out more, read our detailed guide to protected conversations.

What does without prejudice mean?

A without prejudice conversation is also an off-the-record discussion aimed at settling a dispute. However, the legal basis is different.

For the without prejudice rule to apply, there usually needs to be an existing dispute between you and your employer, and the conversation must be a genuine attempt to settle that dispute. Acas explains that the without prejudice principle can apply to different types of legal claims, including unfair dismissal, breach of contract, discrimination and wages claims.

For example, a without prejudice conversation may arise where:

• you have raised a grievance;
• you have complained about discrimination;
• you have been dismissed and are considering bringing a claim;
• you and your employer are already in dispute about your employment rights.

In that situation, the employer may mark a letter or email “without prejudice” and make an offer to settle the dispute.

However, simply putting the words “without prejudice” at the top of a letter does not automatically mean it can’t be used in evidence. The issue remains whether the communication is a genuine attempt to settle an existing dispute.

The key difference

The main difference is this:

A protected conversation does not require an existing dispute. A without prejudice conversation usually does.

That is why employers often use protected conversations when they want to raise the possibility of a settlement agreement before a formal dispute has arisen.

For example, your employer might have concerns about performance, redundancy, sickness absence, or a breakdown in the working relationship. They may not have started a formal process yet, and there may not be a legal dispute. In that situation, the without prejudice rule may not apply, but section 111A might.

By contrast, if you have already raised a grievance or threatened legal action, there may already be an employment dispute. In that case, the without prejudice rule may also be relevant.

In what circumstances can protection be lost?

This depends on the type of claim and whether the legal protection applies.

If the conversation is protected under section 111A, you usually cannot rely on it in an ordinary unfair dismissal claim. However, if the employer has engaged in improper behaviour during the protected conversation, that protection is lost.

If the conversation is genuinely without prejudice, you usually cannot rely on it in tribunal or court proceedings about the dispute being settled. However, that protection is lost if there is “unambiguous impropriety”. This means serious misconduct. The without prejudice rule cannot be used to hide wrongdoing. For example, if an employer uses the conversation to threaten, intimidate, discriminate, blackmail, or put improper pressure on an employee, a tribunal may decide that the conversation is no longer protected. This is a high threshold, so not every unreasonable comment or firm negotiating position will amount to unambiguous impropriety. But where the employer’s behaviour is clearly improper, the employee may be able to refer to what was said, even if the discussion was labelled “without prejudice”

This can be a technical area, so it is worth getting advice before deciding whether the conversation can be referred to in correspondence or tribunal proceedings.

Protected conversation vs without prejudice: quick comparison

Why employers sometimes use both labels

You may receive a letter headed:

“Without prejudice and subject to contract”

or:

“Protected conversation under section 111A Employment Rights Act 1996”

or even:

“Without prejudice, subject to contract and protected under section 111A”

Employers often use several labels to try to maximise confidentiality. But the label used is not decisive. What matters is whether the legal requirements are met.

If there is no existing dispute, calling the discussion “without prejudice” may not be enough. If the discussion is about ending your employment by way of a settlement agreement, section 111A may still protect the discussion in an ordinary unfair dismissal claim.

Equally, if the conversation involves discrimination, whistleblowing, breach of contract, or automatic unfair dismissal, section 111A may not give your employer the protection they think it does.

What does “subject to contract” mean?

You may also see the words “subject to contract” on a settlement offer.

This usually means that the offer is not intended to become legally binding until a formal written agreement is signed. In employment cases, that formal document is usually a settlement agreement.

A settlement agreement is only legally binding if certain statutory conditions are met, including that you receive independent legal advice.

So if your employer makes a “without prejudice and subject to contract” offer, it normally means they are making an offer to settle, but the final agreement still needs to be put into a proper legal document. The offer can be withdrawn at any time before it has been signed by both parties.

What should you do if your employer invites you to an off-the-record meeting?

If your employer invites you to a protected or without prejudice conversation, try not to panic. It usually means your employer wants to discuss a possible settlement agreement.

In most cases, it is sensible to attend the meeting, provided you feel able to do so.

Attending does not mean you accept the offer. It simply allows you to understand what your employer is proposing.

You do not have to agree to anything during the meeting. You can listen, ask questions, and then take legal advice before responding.

If you feel pressured, you can say:

“Thank you for explaining the proposal. I would like to take legal advice before responding.”

That is a reasonable and sensible response.

You should also ask for the proposal in writing, either as a letter, email, or draft settlement agreement.

Can you negotiate?

You’re not obliged to accept your employer’s offer of a settlement agreement. Often your employer is expecting you to make a counter-offer.

The strength of your negotiating position will depend on the circumstances. For example, if your employer has not followed a fair process, or if you may have claims for discrimination, whistleblowing, or unfair dismissal, that may affect the value of the settlement.

For essential advice about negotiation, read our employee’s guide to negotiating the best deal on your settlement agreement.

Before deciding whether to accept, reject, or negotiate the offer, it is sensible to take legal advice. A solicitor can help you understand whether the offer is reasonable, whether you may have any potential claims, and whether there is scope to negotiate better terms. This is especially important because once you sign a settlement agreement, you will usually be giving up your right to bring employment claims against your employer.