Protected Conversations – Will they Help?

The Enterprise and Regulatory Reform Bill is being scrutinised by Parliamentary committee all this week.  Under proposed legislative reforms the Government has said that employers will be able to have “protected conversations” with their employees to try and negotiate exit terms before dismissing them and those conversations will not be able to be relied upon by the employee in any subsequent unfair dismissal claim. 

In reality, such conversations already frequently take place and the issue of whether or not they can be relied upon in subsequent tribunal hearings is often a moot point on the basis that the conversations almost always result in a settlement governed by a compromise agreement – in future to be called a “settlement agreement”.  Therefore, as with many of the proposed changes put forward by the Government with a view to appeasing business, I cannot see how, in any practical way, things will change. 

Indeed, it is already the case that such conversations can be protected under the ordinary “without prejudice” rule.  If the parties are already in dispute, even if the dismissal has not yet taken place, then the employer can enter into such negotiations on a “without prejudice” basis, knowing that such negotiations cannot then be relied upon in any future court or tribunal proceedings. 

However, the Government wishes to add a new section 111A to the Employment Rights Act 1996:

 111A Confidentiality of negotiations before termination of employment

(1) In determining any matter arising on a complaint under section 111 [an unfair dismissal claim], an employment tribunal may not take account of 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.

This is subject to the following provisions of this section.

(2) Subsection (1) does not apply where, according to the complainant’s case, the circumstances are such that a provision (whenever made) contained in, or made under, this or any other Act requires the complainant to be regarded for the purposes of this Part as unfairly dismissed.

(3) In relation to anything said or done which in the tribunal’s opinion was improper, or was connected with improper behaviour, subsection (1) applies only to the extent that the tribunal considers just.

(4) The reference in subsection (1) to a matter arising on a complaint under section 111 includes any question as to costs, except in relation to an offer made on the basis that the right to refer to it on any such question is reserved.

(5) Subsection (1) does not prevent the tribunal from taking account of a determination made in any other proceedings between the employer and the employee in which account was taken of an offer or discussions of the kind mentioned in that subsection.”

What this means in simple terms is that the conversations will only be protected in claims of ordinary unfair dismissal.  The conversations will not be protected in claims of:

  •  automatically unfair dismissal (such as for whistle-blowing etc)
  • discrimination
  • breach of contract
  • where the conduct of the employer has been “improper”

 It’s going to be interesting to see what happens in reality as any legally represented Claimant who wants to rely on a pre-dismissal conversation (which is not protected by the “without prejudice” rule) will no doubt advance multiple claims, with the unfair dismissal being but one of them.  Indeed, even a simple constructive dismissal is frequently both wrongful (i.e. a dismissal in breach of contract) and an unfair.  In that case, will the employee be able to rely on any pre-dismissal conversations?  Quite possibly.

 I am also looking forward to hearing the arguments about what amounts to “improper conduct” in such circumstances.  No doubt employees will try and advance that argument in every case. 

My feelings about these proposed changes are that they will unnecessarily complicate even simple tribunal claims, resulting in even more unnecessary time spent by lawyers arguing over technical points.  The Government wants to free up tribunals and promote early settlement, but I can see this going only one way – increasing the length and cost of proceedings.  Employers and employees who want to reach early settlement of disputes are already well able to do so and therefore these changes will, in my view, affect only those who would have ended up in tribunal anyway and will affect them negatively.

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About Belinda Lester
I am the managing director and founder of Lionshead Law a specialist employment law and HR consultancy company.

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