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What are protected or ‘without prejudice’ conversations?

This article about protected or ‘without prejudice’ conversations is accompanied by a webinar recording, that you can watch on demand.

You will have heard the phrases ‘protected conversation’ or ‘without prejudice conversation’, you may even have some experience of holding them in your business, but what exactly are they and when will it be right to hold them? This article explores the difference between the two and considers why you may want to use them and when.

1. Introduction

It is fair to say that the phrase ‘a job for life’ no longer exists today and an employer is not obliged to sustain a job indefinitely and so the end of the employment relationship can be for many reasons, including when agreed with the employee. This of course sounds straight forward, although the reality can be somewhat different and there are still steps that must be taken to do this in a legally compliant way.

There are occasions when an employer (or even an employee) wishes to negotiate to settle a dispute or agree terms of the employment relationship ending. When both parties agree to mutually part ways, it will usually arise from either a protected or ‘without prejudice’ conversation. Both types of conversations end in the same result – the termination of employment and the signing of a settlement agreement; but there are differences between the two conversations which this article will examine.

2. What is meant by a ‘without prejudice’ conversation?

Firstly, a ‘without prejudice’ conversation requires there to be a dispute already in place between both parties and the conversation must be held with the genuine purpose of attempting to seek a compromise (to settle).

There are no limitations associated to these conversations and so they can cover claims of discrimination, automatic unfair dismissal, unlawful detriment, breach of contract or health and safety matters.

3. What is meant by a ‘protected’ conversation?

On the other hand, under section 111a of the Employment Rights Act, an employer is allowed to have an ‘off the record’ conversation with an employee to discuss exiting the business. This is known as a ‘protected’ conversation or ‘pre termination negotiation’ and allows the employer to have a full and frank conversation without fear of their comments being disclosed at an employment tribunal.

In this instance, there does not need to be an existing dispute, only agreement from the employee to enter the protected conversation and the conversation cannot be improper.

There are limitations to this form of conversation and so it is restricted to straight forward dismissal and/or unfair dismissal cases. If conversations do not fall within this narrow definition, then any such conversations are not protected and could be admitted as evidence in an employment tribunal claim.

A protected conversation can be initiated by the employer or employee, although in most cases it will be the employer approaching the employee.

What is improper in the context of a protected conversation?

If there is improper behaviour during a protected conversation, then the protection is lost. What is improper behaviour can only be determined by an Employment Tribunal based on the circumstances of the case, but examples could include:

  • Where the employer puts undue pressure on the employee to consider any settlement (Acas recommends you allow 10 days for this)
  • Where the employee is told to enter into a settlement agreement or be dismissed. The employee could class this as coercion entitling them to claim constructive unfair dismissal.
  • If the employee feels they are being subjected to unwarranted criticism they can still bring a grievance and if the outcome is that the grievance is not upheld then it is likely that the details of the protected conversation will be disclosed
  • All forms of harassment, bullying and intimidation including the use of offensive language or aggressive behaviour.

Acas does state however that even where there has been some improper behaviour, it does not mean that the employer would go on to lose any unfair dismissal claim.

4. Which conversation to use when?

The issues discussed in a protected conversation enable both parties to have ‘off the record’ discussions and their very existence cannot be disclosed and cannot be waived. In most cases, they are held as a quicker alternative to going through a formal process of dismissal and so reaching the employers desired outcome more quickly. So, you may for instance, wish to use a protected conversation when:

1. You employ a senior manager, but their performance is poor, and you do not have the confidence that it will improve. Rather than manage a lengthy, drawn out process which could become challenging and cause tensions in the relationship you enter a protected conversation with them.

2. You employ a sales manager who has 4 years’ service, but given the pandemic need to restructure the business and need to fundamentally change the role given the changing customer needs. You want to avoid an upsetting process and want the matter to be dealt with as quickly for the employee to save them going through a lengthy and stressful process. You opt to enter a protected conversation to mutually end the employment.

3. Your employee raises the question of whether a settlement is possible during their disciplinary process.

4. You want to terminate the employment contract but there is not sufficient reason for a fair dismissal.

The issues however that can be discussed in a without prejudice conversation are limited to those that can result in claims of discrimination, automatic unfair dismissal, unlawful detriment, breach of contract or health and safety matters. You may for instance, wish to use a without prejudice conversation when:

1. A discussion needs to take place with an employee who has been on long term sick for 10 months because the business has genuine concerns that they will not be able to return (the dispute). Since the matters to be discussed relate to potentially disability health issues and lead to possible discrimination claims, a without prejudice conversation has the advantage over a protected conversation.

2. A female employee has raised a grievance (the dispute) about how they have been treated compared to a male colleague (alleged sex discrimination) and is refusing to return to work after a period of stress related absence. She has asked if she can leave your employment under a settlement agreement.

It is ideal, that regardless of whether a settlement is reached via a protected conversation or a without prejudice conversation, both parties are satisfied with the employment relationship having ended by mutual agreement.

5. Getting it wrong

The risks are high if you enter the wrong ‘off the record’ conversation or where the conversation fails. So extreme care must be taken and seek HR advice as appropriate.

Approaching an employee and offering money in exchange for them leaving could lead to them resigning and bringing a claim for constructive dismissal based on the employer’s breach of the implied term of trust and confidence or anticipatory breach of contract. Alternatively, if they did not resign but were later dismissed, they could argue that the dismissal was predetermined on the basis that previous attempts for them to leave had failed.

Additionally, where there has been improper behaviour, as previously explained, protection from that conversation cannot be relied upon and therefore, the tribunal may consider the full evidence from that protected conversation.

6. Best practice

You will find our template settlement agreements and articles on our knowledge base that align to the Acas code of practice on settlement agreements. It provides specific guidance on what may be considered improper behaviour during protected conversations. https://www.acas.org.uk/code-of-practice-settlement-agreements/html

Suggested best practice may include:

a. Setting out the reasons for the proposal may be helpful to the employee in understanding and ultimately accepting it
b. A ‘reasonable’ period should be given for both parties to consider the proposed settlement agreement.
c. The meeting in which the proposal is put to the employee should be agreed in advance in terms of time and location, so the employee is not taken by surprise
d. Allowing the employee to be accompanied at the meeting may help to progress the settlement discussions
e. The termination date of the employment relationship could either be with the required contractual notice or from the date of the settlement agreement
f. In the situation where the settlement agreement is not agreed, then the dispute or problem leading to the offer being made should be resolved through other means (such as the disciplinary or performance management process).

7. Further Information

If you have a situation that you would like to have guidance on, you can call us on 0844 324 5840 or request a call back via our online contact form at www.hrsolutions-uk.com/contact.

You can also read the Acas code of practice on settlement agreements at www.acas.org.uk/code-of-practice-settlement-agreements/html.

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