Definition - What does dismissal without prejudice mean?
Dismissal without prejudice refers to an employer using an informal approach to discharge an employee on non-discriminatory grounds. Employers apply this tactic to negotiate an agreement with an employee who does not meet company standards. Employers generally pursue this avenue because it can be a cost-effective alternative to further disciplinary action unless the employee deems unfair treatment has occurred, which can be judicially settled.
SureHire explains dismissal without prejudice
Dismissal without prejudice refers to an employer’s attempt to discharge an employee during an informal arrangement in which the objective is to provide reasonable grounds for termination. The "without prejudice" clause can pose a slippery slope for companies depending on the terms discussed and/or reached outside of a tribunal. For employers, discrimination remains a hotbed of legal conflict within the workplace, which they like to avoid at all costs. However, if employers propose a settlement package as a measure to induce the employee to leave the company and the offer is refused by the employee in favor of pursuing legal action, companies run the risk of paying a higher settlement than before the original dismissal without prejudice terms.
