Fact Sheet – Pre-termination negotiations or ‘Protected Conversations’

Followers of our employment law changes timetable will know that 29th July saw a number of changes in employment law. In our latest fact sheet we focus on Confidential Termination negotiations or  ‘Protected Conversations’ a concept which in law is entirely new, yet they will seem very familiar to any employer who has had to hold that difficult ‘things aren’t working out…’ conversation with an employee.

The new rules relating to ‘protected conversations’ came into force on 29 July 2013 with the sole aim of making it easier for employers and employees to have open and risk – free discussions about possible termination of employment when things aren’t working out.

The new legislation effectively states that ‘pre- termination negotiations’ are confidential and are not admissible i.e cannot be referred to in any subsequent unfair dismissal claim.

‘Pre-termination negotiations’ means any offer made or discussions held, before the termination of the employment in question, with a view to it being terminated on terms agreed between the employer and the employee.

What’s new?

This does not sound that different to the general ‘without prejudice’ conversations that employers and employees have been having for years. However, unless those discussions are genuinely held in circumstances where a dispute already exists (which in many cases is not the case) there is a risk that the Employee could use the approach to trigger or support an unfair or constructive unfair dismissal claim.

The intended effect of this new legislation is that employers and employees will not be permitted to refer in a court or Employment Tribunal to pre-termination negotiations, even if there is no pre-existing dispute between the parties, and so can talk freely about the reasons for wanting to end the employment without risk of a claim.

This sounds like the perfect solution to those difficult situations where the only realistic outcome is severance but neither party is bold enough to broach the subject for fear of the repercussions. However, in reality there are legal limitations which prevent ‘protected conversations’ being the ultimate panacea.

Limitations

Only unfair dismissal

It is only in ordinary unfair dismissal claims that pre-termination negotiations cannot be referred to in an Employment Tribunal. If an employee is bringing an automatic unfair claim such as one related to pregnancy, whistleblowing, union membership or asserting a statutory right, evidence of the conversation can be presented to the Tribunal. The same applies in any type of discrimination claim. Therefore, if you are making an approach to your employee you need to think about whether you will actually be protected if they bring a claim against you. You may have to rely on the old ‘Without Prejudice’ rules in place of or in addition to this new procedure.

Similarly, if you are an employee who has made an approach to your employer, whilst your employer won’t be able to refer to it in any unfair or constructive dismissal claim, if you were bringing a discrimination claim of any type, it could be referred to and perhaps used against you.

No Improper behaviour

If ‘anything said or done which in the tribunal’s opinion was improper, or was connected with improper behaviour’ then evidence is admissible only ‘to the extent that the Tribunal considers just’.

Where there is improper behaviour, anything said or done during pre-termination discussions will only be inadmissible to the extent that the tribunal considers it fair. So an employer will not necessarily lose any unfair dismissal claim when improper behaviour has been found, but the Tribunal will be able to hear about the discussions and decide whether or not to allow the evidence.

Examples of ‘Improper behaviour’

  • all forms of harassment, bullying and intimidation, including through the use of offensive words or aggressive behaviour
  • all forms of victimisation and discrimination
  • Physical assault or threats of physical assault, or other criminal or wrongful behaviour
  • putting ‘undue pressure’ on a party

Examples of ‘undue pressure’:

  • Not giving the employee a minimum of 10 calendar days to consider the offer;
  • An employer reducing the value of offer over the course of the 10 days;
  • An employer saying dismissal is inevitable
  • An employee threatening to undermine the organisation’s public reputation

What is not ‘improper behaviour’

  • setting out in a neutral manner the reasons that have led to the proposed settlement agreement
  • factually stating the alternatives if agreement cannot be reached, including the possibility of disciplinary action if relevant or the employee having to leave on less favourable terms
  • not agreeing to pay for legal advice
  • refusing to provide a reference

Conducting pre-termination negotiations

  • The definition refers to ‘discussions’ which suggests a 2–way conversation, perhaps meaning meetings.
  • Although not a statutory requirement ACAS recommends that an employee who is asked to attend any meeting in connection with pre-termination negotiations be given the right to be accompanied
  • When an offer is made it has to be one that is capable of being accepted so the full terms need to be made clear from the outset
  • The offer need not be in writing but ultimately the deal must be tied up using a settlement agreement (previously a Compromise Agreement) which is in writing
  • The Employer must receive legal advice from a relevant adviser before entering into a Settlement agreement
  • ACAS recommends that the employee be given at least 10 calendar days to consider an offer and obtain legal advice

For the ACAS Code of Practice and Non statutory Guidance, see:

ACAS Code of Practice 4, Settlement Agreements July 2013 (pdf)

ACAS Settlement Agreement – A Guide – July 2013 (pdf)