Sir? Madam? Can I interest you in a protected conversation?

Year Published: 2012

The law around “protected conversations”:

This Government, even more than its predecessors, is trying to find ways to reduce the number of Employment Tribunal claims.  It has included within the Enterprise and Regulatory Reform Bill a clause to allow the use of “settlement agreements”.  These are agreements which can be reached after “protected conversations” have taken place between an employer and an employee to bring the employment of the employee to an end when it is clearly not working.

This new suggestion will apply in cases of unfair dismissal.  In those cases the Tribunal must not take into account any offer made or discussions held with an employee that have taken place to try to reach agreement about the terms on which the employee would be prepared to leave their job.

The power not to take account of the details of “protected conversations” will only apply to standard unfair dismissal claims.  However, this means that Tribunals will still be able to take account of “protected conversations” where the employee claims that they have been “automatically unfairly dismissed”. These claims can arise in a number of different ways including but not limited to:

  • Discriminatory dismissals
  • Dismissals on the grounds of health and safety
  • Dismissals for asserting a statutory right
  • Breach of contract

The Tribunal however can introduce evidence of the settlement negotiations where in their opinion the employer’s behaviour was “improper” or connected with improper behaviour. The Tribunal can also introduce evidence of proposed settlements when the offer is made on the basis of “without prejudice save as to costs.”

There must be a dispute between the parties in order for any “without prejudice” meetings to take place.  The reason that employers would want these discussions to be marked out as “without prejudice” discussions is because on that basis the Employment Tribunal cannot be told about the discussions and so they cannot influence any decision that the Tribunal may make.  The Bill proposes to extend the application of this rule to cover claims where there was no prior dispute.

How does this affect me?

As the Bill is still in its consultative stages within the Houses of Parliament the clause does not yet apply and still requires some fine tuning by the Public Committee. “Improper conduct“ by the employer has not been adequately defined and hopefully will receive some clarification before we all become involved in substantial amounts of case law to decide what all this means!

The major difference in this proposed legislation is that employers will no longer require a dispute to be in existence before a settlement agreement can be discussed. However, it is going to prove difficult to second guess any claim the employee may bring and protracted applications and objections to Tribunals hearing about these conversations may just increase costs for all parties.

It will be in the employee’s best interests to bring a claim for one of the automatically unfair dismissal categories to ensure that the settlement discussions can be presented to the Tribunal.  The reason why the employee will want to do that is because they will want to say that the discussions came out of the blue, that it was unfair for them to be singled out for those discussions and they will want to tell the Tribunal all about it.

However, in our view, this proposal does not pose any fundamental change to the way in which negotiations are presently started with employees. Generally employers do not just approach members of staff without good reason to offer them a severance payment.  Usually there is some reasoning behind it.  This reasoning is usually a “dispute” regarding a proposed redundancy, unsatisfactory performance, long-term sickness absence or other work related issues rather than an employer just approaching a member of staff saying “I’m sorry Colin, I don’t like that shirt you’re wearing, shall we discuss a severance package?”.

If you feel you require assistance with approaching an employee about a severance package or you are approached by an employee who would like to leave, please contact our Employment team on 0161 475 7676.

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