You will recall that back in July 2013 a new s111A provision was introduced (into the Employment Rights Act 1996). It provided employers a low risk opportunity to discuss with their employees, the option of exiting under a settlement agreement. The conversation was considered to be a ‘protected conversation’ as it was inadmissible if the employee brought a subsequent claim of unfair dismissal.
A recent judgement in the Employment Appeal Tribunal (EAT) has confirmed the scope of the protection under s111A, and has provided useful additional guidance for employers.
The case involved an employee (B) who initiated settlement discussions with her employer (FFT). Following the discussions, there was correspondence between B’s solicitors and FFT. Settlement discussions broke down and she claimed constructive dismissal and sex discrimination, referring to the settlement discussions and ‘without prejudice’ correspondence that had taken place. FFT subsequently raised the issue of admissibility of the ‘protected conversations’ that had taken place. The EAT made the following findings in relation to the protection afforded by s111A:
• It cannot be waived, even if the parties agree to a waiver. This is distinct from without prejudice protection, which can be waived with the consent of the parties.
• It extends to the fact that there has been an offer as well as the contents of and the discussions around the offer. A claimant cannot rely on the existence of such negotiations in support of an unfair dismissal claim. The protection is not limited only to the content of any offers made.
• The protection covers discussions within an organisation, such as between different managers or between a manager and an HR advisor.
• The cloak of protection can however be lost in circumstances where there has been ‘improper behaviour’. The EAT held that this is wider than the exception to the without prejudice rule, where privilege is removed if there is ‘unambiguous impropriety’.
Practical considerations for employers:
A. ‘Protected conversations’ cannot be referred to and therefore used as a defense against any liability for procedural delays. In order to protect their open position, employers should consider continuing open conversations concurrently with ‘protected conversations’.
B. ‘Improper behaviour’ can include putting the employee under undue time pressure to enter into the settlement agreement and/or telling the employee that they will be dismissed if they do not enter into settlement.
C. Employers must behave fairly to ensure their ‘protected conversation’ remains protected and does not subsequently become admissible as evidence or indeed used to trigger a constructive dismissal claim.