Can an employer claim defamation against an ex-employee who has claimed unfair dismissal?

Question

In UK law, in a case where an ex-employee claims unfair dismissal against their previous employer. However both claimant and employer settle before Tribunal Hearings through negotiation of a COT3 agreement. Can the ex-employee later face defamation claims by the employer regarding their dismissal?

For example, the ex-employee claims their dismissal is because of reason X while the employer has claimed at the time it is categorically not because of reason X but Y & Z. The ex-employee mounts their tribunal claim on the fact that Y & Z have not resulted in dismissal for other staff so X must be the reason. If the claimant shares their believe that X is the reason for dismissal, with friends or colleagues, can they later face defamation charges?

I understand Defamation in the terms of this HSE page.

Answer 1

If the claimant shares their believe that X is the reason for dismissal, with friends or colleagues, can they later face defamation charges?

The viability of a defamation suit depends on the import and basis of ex-employee's statement(s).

Your mention of "ex-employee's belief" suggests the ex-employee made statements of opinion, not statements of fact. Section 3 of the Defamation Act 2013 reflects that premised statements of [genuinely held] opinion are not actionable. This is one example where UK defamation law is less permissive than US defamation law regarding statements of opinion. Under US defamation law, a defendant cannot elude liability merely by framing with "in my opinion", "I think", etc., publications that essentially are statements of fact, whereas UK law goes further by requiring some basis for the statement even if the import it conveys is that of an opinion (and hence a belief). Accordingly, the ex-employee is better off by ensuring that his allegations of reason X are consistent with evidence available to him.

Employer's allegation of reasons Y & Z only reflects a discrepancy with respect to the ex-employee's statements. At the outset, that discrepancy does not strike the ex-employee's entitlement to divulge his opinion or version of the facts (employer's reasons Y & Z might even be pretextual).

Your description does not reflect whether the COT3 agreement includes a clause of non-disclosure and/or a recitation of stipulated facts. If the agreement does, the scope and language thereof would determine whether the employer has any viable claim(s) against the ex-employee. This is why the ex-employee should not stipulate to assertions of facts which he intends to discredit afterwards.

Answer 2

Typically in defamation law, claims made persuiant to litigation are not defamatory, since they are going to be tested for validity if the case goes to trial. I'm not familiar with any differences in what is generally done in settlements between the U.K. and the U.S., but since both are Common Law countries, and Settlements are very common in civil proceedings in the U.S., it's a good start.

Generally a settlemant can occur anytime before the verdict of the case is rendered, although usually it will happen after preliminary hearings during the Discovery phase. In the U.S., Discovery is very broad and one need not prove that the requested items contain evidence but might contain evidence. This means that, for example, you could request a substantial amount of e-mail records from the opposing party because somewhere on the company e-mail server, there might be something to help your case. And even if after you sift through the emails and find no smoking guns related to your case, you could find some dirty laundry that's unrelated but still damning... if not more so than the initial case. Many people, especially big compainies, would rather just give the ex-employee some what he/she wants, if it means they don't get to see the proverbial man behind the curtain.

Additionally the practice might fall into a legally gray area of the law that, if it reaches trial, could hurt the company or even the industry if a judge rules against the company, effectively saying that this gray area is now definately illegal. Better to eat the loss of capital with the settling out of court than to take the much larger hit of the buisness practice being illegalized all together.

Typically in settlements, both parties agree to terms and sign a contract. While the whole of the terms are never discussed, almost all include that the plaintiff will drop the case and never bring the matter to court again and that both parties will sign a non-disclosure agreement (NDA) meaning that they won't discuss the rest of the settlement terms with anyone not party to them.

If the plaintiff does break the NDA, the defendant can sue for breech of contract and recover at the least the monitary compensation they awarded in the settlement. Conversely, if the respondent breaks the NDA, the plaintiff can refile their initial suit with the addition of breech of contract (and this time it will get to court... and all the dirty laundry sees the harsh light of day.).

While the respondent in a settled case can possibly sue for defamation if the plaintiff said the respondent did what the initial suit claimed they did (legally, it was never proven or disproven), or they were guilty (again, since no verdict was reached at trial, no guilt was established), the breech of contract is a much more airtight case and doesn't open up discovery to the respondent's cupability in the settled case (since the breech is about discussing the settled case at all, not the validity of the accusations of the settled case). Typically they would not go this route because then it opens the can of worms the settlement was trying to keep a lid on.