Without Prejudice Chat: Employer Do’s and Don’ts

Without prejudice (WOP) communication can be a practical and helpful tool to resolve employment relationship problems.  However, employers must be aware of the risks involved and understand they can be challenged if not appropriately entered into.  This article explores what WOP is, and how to ensure it will withstand being challenged.

WOP is a type of privilege that can extend to correspondence and conversations between two parties. It enables parties to speak freely and frankly with a view to resolving the matter, without concern that what they say will be used against them/it in litigation or legal proceedings.[1] WOP communication can be used to propose terms that the employment relationship will conclude on. Currently, outside of WOP communication, an employer cannot propose to terminate an employee’s employment without a genuine reason, after following a fair and proper process.

If the privilege is in place, WOP engagements are confidential and legally privileged, meaning they are generally considered to be inadmissible as evidence in Court.[2] However, WOP privilege can be successfully challenged on certain grounds including a lack of consent/duress, there being no pre-existing dispute, a lack of mutual intent, misrepresentation, or unconscionability.

The Employment Court considered such a challenge that was made by an Employee in the recent case of Jin v Precision NZ Ltd [2026][3]. Due to the steps undertaken by the employer, the Court held the status of WOP correspondence entered was protected and therefore inadmissible.  Jin has helped confirm the “do’s” and “don’ts” of WOP conversations in the workplace.

The “do’s”

To ensure that the privilege attaches, employers should:

• Be sure an employment relationship problem (“ERP”) exists between the employer and employee and clearly communicate what this is.[4]   
• Advise the employee what WOP means, what it is designed to do, and when it can be challenged.[5]
• Advise the employee that they have the right to seek legal advice before communicating on a WOP basis and provide them a reasonable opportunity to do so.
• Explain to the employee that they are not obligated to engage in WOP discussions with you and can decline to engage further at any time without disadvantage.
• Make clear to the employee when you are speaking on a WOP basis, and when you are not. If communicating on a WOP basis in writing, you should clearly mark all communications with “Without prejudice” to avoid any ambiguity.
• Communicate on a WOP basis to resolve the ERP.
• Even if an agreement is reached in principle, you should ensure that you retain the WOP status of all conversations until the matter is resolved on a full and final basis.

Note: in the employment context, this may be through the signing and execution of a s149 Record of Settlement between the parties.[6]

The “don’ts”

When it comes to WOP conversations, employers should exercise caution in respect of the following:

• If an employee declines to engage on a WOP basis, the employer should take the conversation no further. A key element to ensuring that legal privilege is properly applied to communicating on a WOP basis, is the freely given consent of both parties.
• An employer must not attempt to coerce or convince an employee into communicating on a WOP basis after they have declined.
• The purpose of WOP exchanges is to resolve the matter. Matters outside of the ERP should not be discussed.

Failure to heed the warnings above could result in your WOP discussions being considered admissible as evidence in the Employment Relations Authority or Employment Court, creating legal, reputational, and financial risk to you and your business.

The future of WOP

Employers should keep an eye out in future, however, for the proposed new Employment Relations (Termination of Employment by Agreement) Amendment Bill (“the Bill”)[7]. The purpose of the Bill is to allow for employers and employees to engage in mutually agreed “protected” pre-termination communications, without the need for an ERP.

The proposed new process will still require employers to take specific steps to engage in protected discussions (largely mirroring those outlined in the ‘do’ section above) before the communication will be afforded legal protection. Where pre-termination negotiations comply with the requirements of the Bill, then evidence of those negotiations would be inadmissible in any proceeding before the Authority or Court.

Risks would remain for employers if there were a defect in their process, resulting in the unfair treatment of the employee.  If the Authority or Court found a defect in the pre-termination negotiation process, an employee could challenge the validity of the termination agreement.

The Bill seeks to truncate the current WOP process, provide parties to an employment relationship more freedom to negotiate, and reduce the risks employers currently face.

The Bill is currently at the second reading stage.  If it is to become law, it must pass through the committee of the whole house and a third reading in parliament, before receiving royal assent and coming into force.  Harkness Henry will keep abreast of all updates relating to the Bill.

In the meantime, employers should remain cautious in approaching their employees on a without prejudice basis, unless they are confident that they have created a genuinely privileged space to do so, in accordance with the guidance outlined above.

If you are an employer wanting further advice about engaging in an off the record conversation with an employee, please contact our Harkness Henry specialist employment law team.  We can also assist if you are an employee who has been invited to a WOP discussion by your employer.

[1] Morgan v Whanganui College Board of Trustees [2014] NZCA 340.

[2] Minister of Education v Reidy McKenzie Ltd [2016] NZCA 326 at [21].

[3] Jin v Precision NZ Ltd [2026] NZEmpC 121.

[4] Jin v Precision NZ Ltd [2026] NZEmpC 121 at [23]

[5] Jin v Precision NZ Ltd [2026] NZEmpC 121 at [24].

[6] S149 of the Employment Relations Act 2000.

[7] Employment Relations (Termination of Employment by Agreement) Amendment Bill.

This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.