Posted on: Oct 23, 2014

The question of whether privilege can be lifted with regard to communications made “without prejudice” has recently met with roughly the same response as the question of whether what happens in mediation can be disclosed.

The Court of Appeal refused to accept arguments that the position with “without prejudice” communications was somehow different in the employment law arena. The Employment Relations Act 2000 promoted the desirability of employer and employee first attempting to resolve problems themselves before any judicial intervention or even mediation. Communications made “without prejudice” between parties or their representatives were an important part of that picture. Public interest decreed that parties should be able to speak frankly, secure in the knowledge that their words would not thereafter be held against them in court.

In so finding, the Court of Appeal endorsed that of the Employment Court, in which Chief Judge Colgan had held that:

it was not necessary for a “dispute” (in the narrow sense of that word) to be in existence for “without prejudice” communications to attract absolute confidentiality.

It rejected an earlier Employment Court decision (Bayliss Sharr & Hansen v McDonald (2007) 8 NZELC 98,632) which had adopted the more prescriptive view.

The Court considered that the existence of “negotiations” or “difference” between the parties could be sufficient.

There simply needed to be a serious problem that required resolution and the problem would have to be one that could give rise to litigation, the result of which might be affected by an admission during negotiations.

In the case before it, one of a teacher who had admitted from the outset that his conduct amounted, technically at least, to serious misconduct, it would have been apparent prior to his representative talking to the school board’s representative that there was a serious problem for resolution. The board was bound to take disciplinary action and so the question really was only whether it would result in dismissal or a lesser sanction. Since a personal grievance was a real possibility if the former was chosen, there was indeed a problem that could give rise to litigation whose outcome might be affected by what was said “without prejudice” by the representatives.

Morgan v Whanganui College Board of Trustees (2014)



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