Without Prejudice Settlement Offer (Employment)
Without prejudice letter offering to settle an employment dispute on agreed financial and non-financial terms, protected under section 111A of the Employment Rights Act 1996.
When to use this template
Use this letter to make a protected settlement offer in an employment dispute, typically where the employment relationship has broken down. A conversation or letter marked 'without prejudice' and made under s.111A ERA 1996 cannot generally be disclosed to an Employment Tribunal in unfair dismissal proceedings. This protects both parties in making a genuine attempt to settle.
When NOT to use this template
The s.111A protection does not apply to discrimination claims or where there has been 'improper behaviour' by either party. It also does not protect communications in breach of contract, whistleblowing, or automatic unfair dismissal claims. Consider whether a ACAS Early Conciliation or judicial mediation might be more appropriate. Take legal advice before making or accepting a settlement offer.
Legal Basis
Employment Rights Act 1996, s.111A (protected conversations); without prejudice rule (Rush & Tompkins v GLC [1989]). An employer making a settlement offer must not pressurise the employee into accepting it. The minimum period for the employee to consider the offer is 10 calendar days (ACAS Code of Practice on Settlement Agreements, 2013). A valid settlement agreement must be in writing, signed by both parties, and the employee must have received independent legal advice.
Common Mistakes to Avoid
- ✗Not marking the letter clearly as 'Without Prejudice and Subject to Contract'
- ✗Giving less than 10 calendar days for the other party to consider the offer
- ✗Forgetting that a binding settlement agreement requires the employee to have received independent legal advice
- ✗Including the settlement offer in the same letter as disciplinary or performance allegations — keep them separate
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Letter preview
[YOUR FULL NAME (EMPLOYEE)] [YOUR ADDRESS] [DATE OF LETTER] HR Department / The Directors [EMPLOYER'S NAME / COMPANY NAME] --- **WITHOUT PREJUDICE AND SUBJECT TO CONTRACT** **PROTECTED CONVERSATION — EMPLOYMENT RIGHTS ACT 1996, s.111A** Dear Sir or Madam, **RE: WITHOUT PREJUDICE SETTLEMENT PROPOSAL** I write without prejudice and subject to contract, and in the spirit of a protected conversation pursuant to section 111A of the Employment Rights Act 1996, to propose terms on which the current employment dispute between myself and [EMPLOYER'S NAME / COMPANY NAME] might be resolved by way of a negotiated settlement. Nothing in this letter is intended as an admission of liability by either party. **Proposed financial terms** I propose that [EMPLOYER'S NAME / COMPANY NAME] pay to me the sum of £[PROPOSED SETTLEMENT AMOUNT (£)] (gross), to be paid within 14 days of the date of a signed settlement agreement. This sum is intended to compensate for all claims I may have arising from my employment and its termination, including but not limited to claims for unfair dismissal, breach of contract, and unpaid wages. **Proposed non-financial terms** [PROPOSED NON-FINANCIAL TERMS] **Agreement** I propose that the parties enter into a formal settlement agreement (commonly known as a compromise agreement) in standard form, under which I would agree to waive all claims arising from my employment in exchange for the above terms. I confirm my understanding that I would be required to obtain independent legal advice on the terms of any such agreement before it becomes binding. **Confidentiality** I propose that the terms of any settlement remain confidential as between the parties. **Response deadline** I invite you to respond to this proposal by [DEADLINE FOR RESPONSE (MINIMUM 10 CALENDAR DAYS)]. I am available to discuss this matter further by telephone or in a meeting if that would assist. Yours faithfully, [YOUR FULL NAME (EMPLOYEE)]
Unfilled fields appear as [FIELD NAME]. Review the letter carefully before sending. This template is a starting point — adapt it to your specific circumstances.