Faithorn Farrell Timms Plc v Bailey – protected conversation privilege cannot be waived

In the case of Faithorn Farrell Timms Plc v Bailey UKEAT/0025/16/RN the Employment Appeal Tribunal (“EAT”) held that the parties to litigation had waived without prejudice privilege (which would otherwise have applied) and that the correspondence which was otherwise subject to that without prejudice protection was admissible; however, the EAT held that but that the parties could not waive privilege that applied to communications by virtue of section 111A Employment Rights Act 1996 (also known generally as “protected conversations”).

Ms Bailey worked as a secretary for Faithorn Farrell Timms plc (“Faithorn”), a surveyor’s firm. She worked at the organisation from 16 March 2009 to the date of her resignation on 26 February 2015. She initially worked on a part-time basis as an office secretary but she was told in December 2014 that working part-time was no longer an option. She therefore initiated discussions regarding a settlement agreement. By 7 January 2015 the parties were engaged in a dispute and Ms Bailey was alleging that she was being treated unreasonably (sufficiently so, she said, to trigger her resignation and a constructive dismissal claim) and that she was being discriminated against on the grounds of her sex.

Between January 2015 and May 2015 Ms Bailey and Faithorn engaged in correspondence regarding Ms Bailey’s threatened claims and settlement terms, variously on their own behalves and through their solicitors. Various pieces of correspondence were sent by both parties headed “without prejudice” but some were not. In producing an outcome to Ms Bailey’s grievance Faithorn relied on various pieces of correspondence between the parties, both headed “without prejudice” and not.

Ms Bailey resigned on 26 February 2015 and submitted claims for constructive dismissal and direct sex discrimination on 6 May 2015. In her claim she referred to initiating settlement agreement discussions on 10 December 2014 and referenced correspondence between the parties as evidencing bullying and discrimination.

Faithorn, in its response to Ms Bailey’s claims, did not assert privilege (whether common law or statutory) but responded to (and indeed relied on) the factual points that Ms Bailey had detailed in her claim, including the existence and details of settlement discussions.

During the Employment Tribunal proceedings, an issue arose as to the admissibility of various party to party correspondence and the Employment Tribunal undertook a preliminary hearing to rule on this issue. The Employment Tribunal held that the documents in issue were neither rendered admissible by virtue of section 111 Employment Rights Act 1996 (as a “protected conversation”) nor by the common law without prejudice privilege as the parties had waived privilege. Both parties appealed.

The EAT held that there had been no error of law with regards to the Employment Judge’s conclusion that both parties had expressly waived privilege by relying on otherwise-without prejudice documents in both the grievance process (both in Ms Bailey’s submissions and Faithorn’s outcome) and in pleadings (both Ms Bailey and Faithorn referred to the fact and content of nominally without prejudice documents in, respectively, their claim and response). The EAT did, however, state that the parties could not have waived privilege with regards to communications that fell under the ambit of section 111A ERA 1996 as it was not possible under the wording of the statute to waive privilege; further, the EAT held that communications which fell under the ambit of section 111A ERA 1996 were privileged in respect of both their existence and contents, and that such information was therefore inadmissible.

Chris Hadrill, a specialist employment solicitor at Redmans, commented on this case: “This is the first appeal judgment of the nature of the application of section 111A of the Employment Rights Act 1996, and clarifies the law relating to communications under this section. This judgment also stands as a useful reminder to parties that they should be careful about the labeling of communications as ‘without prejudice’ or not, and that they should be equally careful not to unintentionally waive privilege.”

The judgment of the EAT can be found here.