Without prejudice letter: Tax savings for out of court settlements

[Address]

28th September [Year date]]

WITHOUT PREJUDICE

Dear Sirs

[Name of employee] v [Company]

We write in response to your recent letter offering £ [£ low amount] in relation to settlement. We find such low offers unhelpful although we accept that perhaps you were unaware of your client’s previous offer to our client, which was in fact much higher.

As stated in our letter of 2nd September [Year date], your client’s previous offer was 2 months’ PILON, plus an ex gratia payment of one month’s basic at £ [£ amount] plus commission for May [year date]. This was offered in a call by [Company] to  [Employee’s name] at around 11 am on Tuesday 7th June [Year date]. Your client also sent our client a spreadsheet setting out the commission calculation for May  [year date] at £ [£ amount]. Thus your client’s previous offer totalled around £ [£ amount] plus PILON, which exceeded your client’s most recent offer by £13,500.

You have now put forward a lower offer, despite the fact that proceedings have progressed and our client has significantly strengthened his claim, by serving a questionnaire and by providing further information, a schedule of loss and evidence of mitigation of loss. Putting forward a lower offer only serves to antagonise [Employee’s name] and make the chance of a fully contested hearing much more likely.

[Employee’s name] would prefer to settle this matter amicably, but he does have the time to put aside to bring this matter to trial as he has not found another job, contrary to your assertions. Why do you think that he has found alternative employment? We have sent openly the schedule of loss which confirms the fact that our client still does not have another job. We also attach a redacted email of today’s date which shows that our client is still trying to find another job. [Employee’s name] has performed his duty to mitigate so far.

If you look carefully at Part B question b) of the schedule of loss document (which is an Employment Tribunal pro forma template provided by HMCTS) you will see that it specifically provides for loss arising from a share option scheme under the ‘loss of benefits’ section. Therefore your position that share options cannot be claimed per se is untenable – the loss stems from the unfair dismissal and an employer should not be allowed to benefit from breaching employment law.

We have also sent openly details of one of our client’s witnesses in relation to discrimination – again, this is enough to raise a prima facie case of discrimination which your client would have to disprove. [Witness] has recently resigned and is willing to attend the Tribunal to give evidence in support of [name of employee].

As stated previously, our client would be willing to consider structuring any settlement deal to ensure maximum tax efficiency. There is also scope for negotiation whereby both sides could meet somewhere between the two initial positions. We, therefore, await a revised offer from your client in light of the above.

Yours faithfully