Performance Management Conversations and Without Prejudice Privilege – Considerations for Irish Employers

Introduction

A recent decision of the Workplace Relations Commission (WRC) has raised important issues for employers to consider when engaging with employees in relation to performance management conversations.

In seeking to short-circuit matters for the benefit of all parties, employers may sometimes look to have frank discussions with employees about their future in the company on the assumption that such conversations are “off the record” or “without prejudice”. As highlighted by the WRC, unlike the UK, employment law in Ireland does not provide employers with automatic protection for such conversations.

Confusion arises as employers in the UK do benefit from protection when engaging in “pre-termination negotiations”. Under the terms of the UK Employment Rights Act 1996, evidence of “pre-termination negotiations” is inadmissible in any related proceedings. This allows UK employers to make proposals for termination as part of a discussion without risk of such proposals be used as evidence against them at a later stage. This allows parties to have more open and honest discussions similar to “without prejudice” privilege used to settle disputes in this jurisdiction.

However, as we set out below, this privilege is not an automatic right in Ireland.   

Without Prejudice Privilege

Without prejudice discussions are regularly used in this jurisdiction and are a valuable tool for the efficient settlement of disputes.

Such discussions promote the settlement of disputes by enabling parties to discuss their dispute and the relative strengths and weaknesses of their case in the comfort that anything said during the negotiations cannot be used against them in the proceedings. Without the benefit of without prejudice privilege, any concession made, or compromise offered in the course of negotiations would be treated as an admission and would be admissible against the party making the proposal.

However, it is not simply open to a party to invoke without prejudice privilege. For it to apply the following criteria must be satisfied.

The communication must be made:

a)      as genuine effort to settle a dispute between the parties: and

b)     with the intention that, if negotiations fail, the communication cannot be disclosed.

For the first criteria to be satisfied a dispute must exist between the parties in respect of which legal proceedings are either commenced or are contemplated. If there is no dispute, the privilege does not apply. This is a common stumbling block for employers in this area as it is often assumed that the privilege can be invoked on demand, which is not the case.

Subject the first criteria being satisfied, the second criteria is often satisfied where the party marks the communication “without prejudice”. This is obviously, strong evidence of the party’s intention that privilege should apply.  However, even where such a heading is not present, the privilege may be invoked where it is clear from the contents of the communication and the surrounding circumstances that the communication was made in the furtherance of settlement.        

Employers and many other parties sometime seek to invoke without prejudice privilege to absolve them from the legal consequences of communications which have little or nothing to do with settlement of a dispute. However, notwithstanding the party’s belief, if the above criteria are not satisfied, no such privilege shall apply.

Recent WRC Decision

This issue was highlighted in the recent decision of the WRC, Danica Gutierrez v Cafico Corporate Services Limited[1]. The decision highlighted the risks to employers in seeking to have a frank conversation with an employee when engaging in a performance management conversation and the risk that such conversation may be perceived as a breach of the employer’s common law duties.

In that case the Complainant was employed as a Senior Manager with the Respondent. The Complainant was invited to a meeting with a senior member of the Respondent on 26 September 2023 at which she was advised that she was being placed on a Performance Improvement Plan (PIP). The Complainant asserted that she was given no advanced warning of the process nor had she any reasons to suspect such a process would be invoked. Further she asserted that the PIP had no clear measurable or tangible goals, as would normally be expected.  Three working days after the meeting, the Respondent was invited to a further meeting where she was offered a voluntary severance package of 2 months’ salary and a €5,000 ex-gratia payment. As the Complainant’s contractual notice was 3 months, this offer was in breach of her contractual entitlement.

The Claimant asserted that the trust and confidence was lost from the relationship and, as a result, she had been constructively dismissed from the company.

The Respondent disputed the Complainant’s position that the meeting and PIP was instituted without cause and asserted that the PIP was necessary following several complaints by clients against the Complainant. It further asserted that the follow up meeting was prompted by a further complaint against the Respondent following the initiation of the PIP.  The Respondent further disputed the Claimant’s account of the follow up meeting and the allegation that the CEO had stated that it was only a matter of time before the Claimant would be exited from the company.         

In deciding the matter, the WRC acknowledged that several matters of evidence were in dispute between the parties. However, the Adjudicator held that such conflicts were not relevant for the purposes of the case and instead focused on the undisputed fact that the Complainant was offered two months’ salary and €5,000 to exit the company.

The Adjudicator held that this was a defining moment where the employment relationship was unequivocally and unambiguously damaged by the Respondent. Therefore, the Respondent’s conduct, in terms of the subject matter of the discussion and the timing was in the Adjudicator’s view, sufficient to justify the Complainant’s termination of her employment. The Adjudicator held that inviting an employee to a meeting at short notice, unaccompanied, and offering a package to exit the company goes to the very root of the relationship between the employee and the employer, utterly undermined the implied terms of trust and confidence and was the embodiment of unreasonableness.

On that basis, the Adjudicator held that the complaint was well founded and awarded the Complainant €17,917.50 in compensation. Due to the fundamental breakdown in the relationship the Adjudicator did not consider reinstatement or re-engagement.  

Considerations For Employers

It is clear from the decision, that the Adjudicator placed a heavy emphasis on the conversation that took place at the follow up meeting which, was held to be the defining moment in the breakdown of the relationship of trust and confidence.

There is no automatic protection applied to such conversations in Ireland and given that the parties were not in dispute at the time, without prejudice privilege would not have applied.

Based on the decision, the Respondents decision to make an offer to the Complainant at such an early stage was ill advised. Even if the offer was made in good faith, the WRC considered that it had a detrimental impact on the relationship and was critical to its finding against the Respondent. 

Employers should consider the consequences of this decision when considering an exit conversation as an alternative to a PIP.  Employers should exercise caution when engaging in such discussions and should never assume any conversation is “without prejudice” or “off the record” unless the necessary criteria is present.

This decision does not mean that all exit conversations should be avoided but employers must ensure that the timing and language used in such discussions is appropriate to reduce the risk that the company would be accused of having predetermined the outcome.

Contact Us

For more information on this or any other topic, please contact Billy Casserly or any other member of the Power Law team.    

Published on LinkedIn 29 September 2025