What is a without prejudice settlement offer in employment?

A without prejudice settlement offer is a protected communication used to resolve an employment dispute, typically when the relationship has broken down. Under section 111A of the Employment Rights Act 1996, such offers cannot generally be disclosed to an Employment Tribunal in unfair dismissal proceedings. This protection encourages both parties to make genuine attempts to settle without fear that their proposals will be used as evidence against them later.

How long does an employee have to consider a settlement offer?

The employee must be given a minimum of 10 calendar days to consider the offer. This requirement is set out in the ACAS Code of Practice on Settlement Agreements. Giving less than this period is a common error that can invalidate the process. The offer should also be clearly marked 'Without Prejudice and Subject to Contract' to ensure it is protected.

What makes a settlement agreement legally binding?

A valid settlement agreement must be in writing and signed by both parties. Crucially, the employee must have received independent legal advice on the terms before the agreement becomes binding. Without this independent advice, the agreement may not be enforceable, even if both parties have signed it. This requirement ensures the employee understands the rights they are waiving.

What are common mistakes when sending a settlement offer?

Common mistakes include failing to mark the letter clearly as 'Without Prejudice and Subject to Contract', giving less than 10 calendar days for consideration, and forgetting that independent legal advice is required for the agreement to be binding. Another error is including the settlement offer in the same letter as disciplinary or performance allegations; these should be kept separate to maintain the protection of the settlement discussion.

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Employment

Employment Law

Updated 2026-04-17

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.

This template was not drafted by a solicitor.

It is an editorial reference based on the official sources we cite. You are responsible for any document you send. For high-stakes matters (court proceedings, large sums, deportation, criminal allegations, child welfare), have a regulated solicitor review or draft your document.

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.

Before you send

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

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

Build Your Letter

Fill in your details

Complete the fields below. Required fields are marked with *.

Your full name (employee)*

Your address*

Date of letter*

Employer's name / company name*

Proposed settlement amount (£)*

Deadline for response (minimum 10 calendar days)*

Optional fields

Proposed non-financial terms

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.

Related Guides

Unfair Dismissal Claim

Related Rights

Official Resources

ACAS — Settlement Agreements →GOV.UK — Settlement Agreements →

Frequently asked questions

What is a without prejudice settlement offer in employment?: A without prejudice settlement offer is a protected communication used to resolve an employment dispute, typically when the relationship has broken down. Under section 111A of the Employment Rights Act 1996, such offers cannot generally be disclosed to an Employment Tribunal in unfair dismissal proceedings. This protection encourages both parties to make genuine attempts to settle without fear that their proposals will be used as evidence against them later.
When does without prejudice protection not apply?: The protection under section 111A does not apply to discrimination claims, whistleblowing claims, automatic unfair dismissal claims, or breach of contract communications. It is also void if there has been 'improper behaviour' by either party. Additionally, the protection does not cover communications that are not clearly marked as without prejudice. If these exceptions apply, the offer may be admissible in tribunal proceedings.
How long does an employee have to consider a settlement offer?: The employee must be given a minimum of 10 calendar days to consider the offer. This requirement is set out in the ACAS Code of Practice on Settlement Agreements. Giving less than this period is a common error that can invalidate the process. The offer should also be clearly marked 'Without Prejudice and Subject to Contract' to ensure it is protected.
What makes a settlement agreement legally binding?: A valid settlement agreement must be in writing and signed by both parties. Crucially, the employee must have received independent legal advice on the terms before the agreement becomes binding. Without this independent advice, the agreement may not be enforceable, even if both parties have signed it. This requirement ensures the employee understands the rights they are waiving.
What are common mistakes when sending a settlement offer?: Common mistakes include failing to mark the letter clearly as 'Without Prejudice and Subject to Contract', giving less than 10 calendar days for consideration, and forgetting that independent legal advice is required for the agreement to be binding. Another error is including the settlement offer in the same letter as disciplinary or performance allegations; these should be kept separate to maintain the protection of the settlement discussion.