Off the record discussions or protected conversations have played a significant role in employer-employee exit negotiations since they became inadmissible in unfair dismissal proceedings on the 29thJuly 2013, but not every conversation is automatically protected. To what extent can employers genuinely have an off the record discussion?
Under section 111A of the Employment Rights Act 1996, employers can have confidential, frank conversations with employees in connection with exit negotiations but such conversations are not guaranteed to remain inadmissible in an unfair dismissal claim. The law states that if an employee is asserting there is an automatically unfair reason for the dismissal then these conversations could become admissible in the Tribunal and used as evidence against the employer. The same can be said for situations where the claim is not considered “ordinary” or if the employer is proven to have behaved improperly during the negotiations.
Testing the limits
Up until very recently no case law has tested the limits to this protection, but in the case of Faithorn Farrell Timms LLP vs Bailey we were able to see how far the scope of privilege extends.
This particular case was raised following an issue in relation to Mrs Bailey’s (the claimant) working hours which led to her initiating discussions about a settlement agreement. These discussions took place over the exchange of several “without prejudice” letters between her and the employer but no agreement was made and eventually she raised a grievance in which she referred to the negotiations. The grievance was not upheld and Mrs Bailey resigned, claiming unfair constructive dismissal as well as gender discrimination, again making specific reference to the previous settlement negotiations in order to evidence her employer’s “threatening and bullying behaviour”.
During the Tribunal hearing, the admissibility of the documents referencing the negotiations was questioned but the documents were still concluded to be admissible in part due to the gender discrimination claim. The Tribunal declared that such a claim brought by Mrs Bailey meant some of the contents of the documents were no longer protected and equally the fact the negotiations took place was also no longer protected. This led to the employer appealing the decisions, claiming the Tribunal’s approach to section 111A was too restrictive.
Following this appeal, the Employment Appeal Tribunal (EAT) reversed the decision and concluded that the inadmissibility of the settlement negotiations did in fact extend to the entire contents of the discussions and even the very fact such discussions took place.
The result of this appeal gives employers a far clearer idea of how far these conversations can be used in an employment tribunal and to what extent they can remain inadmissible. The case highlighted that claimants cannot rely on the existence of settlement or exit negotiations to support any unfair dismissal claims and the “without prejudice” principle cannot be waived by the parties involved in order to admit evidence.
Three tips for employers during exit negotiations:
- Keep discussions as neutral and factual as possible to minimise the risk of a claim of improper behaviour;
- Provide the settlement offer to the employee in writing during the off the record discussion either in the form of a letter (clearly marked that it relates to a protected conversation) or settlement agreement;
- Give the employee a sufficient amount of time to consider the offer being made to avoid undue pressure on the employee; the ACAS Code of Practice suggests 10 days to consider an offer.