Communicating dismissal in ‘without prejudice’ correspondence

You might think that it would be tricky for an employer to dismiss an employee without meaning to. A recent Employment Appeal Tribunal decision highlights the importance of careful drafting when making offers of settlement.

In Meaker v Cyxtera Technology UK, Mr Meaker’s employer sent him a letter on 5th February 2020 which was marked ‘without prejudice’. The letter said there would be a mutual termination of Mr Meaker’s employment on 7th February 2020. No agreement had actually been reached with Mr Meaker.

The letter went on to make an offer of an additional payment to the employee if he signed a settlement agreement. Mr Meaker did not sign the settlement agreement.

The Employment Tribunal found that Mr Meaker’s employment terminated on 7th February 2020. The EAT agreed. The additional payment was dependent on him signing a settlement agreement, but the dismissal was not.

This case is a reminder of the need for careful drafting when making offers of settlement. If the full offer (including termination of employment) had been stated to be conditional on the signing of a settlement agreement then, if the offer had not been taken up, the employee would have remained employed and the employer would still have had the chance to deal with dismissal openly (and fairly).