Protected Conversations

What is a protected conversation?

A confidential conversation between an employer and an employee regarding the termination of employment on agreed terms in the knowledge that such a conversation is in certain circumstances “protected”.

Any offer an employer makes to an employee relating to the termination of their employment will normally be recorded in what is called a settlement agreement.  The pre-termination negotiations and terms of the settlement are protected in so far as they cannot be used by the employee in any subsequent employment tribunal claim for unfair dismissal, under sections 111A of the Employment Rights Act 1996 (ERA).

Protected conversations can be started by either an employer or an employee.  However, neither has to participate in such a conversation.

Under section 111A of the ERA, pre-termination negotiations can be treated as confidential even where there is no current employment dispute or where the employer or the employee is aware that there is an employment problem. However, there are some exceptions to the application of section 111A, which are:

  • claims that relate to an automatic unfair reason for dismissal, such as, whistleblowing, union membership or asserting a statutory right
  • claims made on grounds other than unfair dismissal, such as claims of discrimination, harassment, victimisation or other behaviour prohibited by the Equality Act 2010
  • claims relating to breach of contract or wrongful dismissal.

The provisions of section 111A are, additionally, subject to there being no improper behaviour

What is Improper behaviour?

What amounts to improper behaviour is ultimately for an employment tribunal to decide on the facts and circumstances of each case, but it will include behaviour that would be regarded as unambiguous impropriety under the “without prejudice” rule.

Examples of improper behaviour are (but not be limited to):

  • all forms of harassment, bullying and intimidation, including through the use of offensive words or aggressive behaviour
  • physical assault or the threat of physical assault and other criminal behaviour
  • all forms of victimisation
  • discrimination because of age, sex, race, disability, sexual orientation, religion or belief, transgender, pregnancy and maternity and marriage or civil partnership
  • putting undue pressure on a party (eg an employer saying before any form of disciplinary process has begun that if a settlement proposal is rejected an employee will be dismissed).

In situations where there is no existing dispute between the parties, the “without prejudice” rule cannot apply but section 111A can apply. In these circumstances the offer of, and discussions about, a settlement agreement will not be admissible in a tribunal (in an unfair dismissal case) so long as there has been no improper behaviour. Where an employment tribunal finds that there has been improper behaviour, any offer of a settlement agreement, or discussions relating to it, will only be inadmissible if, and in so far as, the employment tribunal considers it just.

Where there is an existing dispute between the parties, offers of a settlement agreement, and discussions about such an agreement, may be covered by both the ‘without prejudice’ rule and section 111A. The ‘without prejudice’ principle will apply unless there has been some ‘unambiguous impropriety’.

In court or tribunal proceedings other than unfair dismissal claims, such as discrimination claims, section 111A does not apply. In these cases, the ‘without prejudice’ principle can apply where there is an existing dispute at the time of the settlement offer and discussions, meaning that these will not be admissible in evidence unless there has been some unambiguous impropriety.

What is a settlement agreement?

Settlement agreements normally involve an employer agreeing to make a financial offer of payment to an employee in exchange for their agreement not to pursue an employment claim and are a way of avoiding the stress, uncertainty and cost of pursuing a claim.

An employer may pre-emptively offer a settlement agreement when dismissing an employee possibly because they have not or do not want to follow the proper procedure. 

An employee must take independent legal advice before signing a settlement agreement for the agreement to be legally binding.

An employee should be given a reasonable amount of time to consider the proposed settlement agreement. What amounts to a reasonable amount of time will depend on the circumstances of the case. As a rule, a minimum period of 10 calendar days should be allowed to consider the proposed formal written terms of a settlement agreement and to receive independent advice, unless the employee and the employer agree otherwise.

If an employee signs a valid settlement agreement, they will be unable to bring an employment tribunal claim about any type of claim which is listed in the agreement. Where a settlement agreement is not agreed upon, an employee may bring a subsequent claim to an employment tribunal unless the claim relates to an allegation of unfair dismissal the confidentiality provisions of section 111A of the ERA will apply.

Where there has been some improper behaviour for these purposes this does not mean that an employer will necessarily lose any subsequent unfair dismissal claim that is brought to an employment tribunal.

Please see web page Settlement Agreements

What if a settlement agreement cannot be agreed?

An employee does not have to agree the terms of a settlement agreement.

If an employee rejects a settlement agreement, they may still wish to resolve the dispute or problem that led to the offer being made and some other form of resolution could be sought. Depending on the nature of the dispute or problem, resolution could be through a grievance process or using Acas early conciliation, whichever is appropriate.

Please see web page Acas Early Conciliation

The material contained in this web page is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.

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