Protected conversations: off the record?

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Are protected conversations with employees off the record?  The Government intended recent employment legislation to enable employers to conduct “off-the-record” protected conversations, when terminating employees. However, the legislation has nasty catches. Employers who are not careful are caught out.

Protected conversations cannot be used in subsequent employment tribunal proceedings for unfair dismissal claim. For employers, this sounds helpful.  However, if the discussion does not meet the strict definition of a protected conversation, the discussion can be used in an Employment Tribunal claim.

Protected conversations: typical scenario

As a general rule, a conversation entered into to settle a dispute is “without prejudice”. It cannot be used as evidence in subsequent legal proceedings. However, this rule only applies if the conversation takes place with a view to settling a specific, actual or contemplated dispute.

However, take the common situation where things aren’t working out. The employer concludes that it’s best to part ways. Yet the employer doesn’t want to undertake a formal disciplinary or performance management procedure.  Matters haven’t deteriorated to the extent that the employer and employee are actually in dispute.  Afterall, if the employer suddenly initiates the conversation, then there cannot be a dispute at that time.

If conversations are not “without prejudice” employees argue that their employer told them to resign or be dismissed. This is a (unfair) constructive dismissal.

Perhaps an employee stays and is subject to a disciplinary process. The employee can then argue the outcome was preordained. Thus any subsequent decision to dismiss is unfair.

Protected conversation with employees: New legislation

New legislation tries to resolve this problem. For example, an employer now enters settlement discussions, planning to negotiate an employee’s departure. There is no existing dispute.  An employee cannot now bring an unfair dismissal claim to an Employment Tribunal based on these discussions’ fact or contents.

Unfortunately, important caveats can prevent employers establishing a protected conversation:

Negotiate a settlement

The conversation must be entered into with a view to negotiating a settlement. Employers can’t tell an employee to:

  • Resign or be dismissed;
  • Sign a settlement agreement or be dismissed.

Such behaviour is still “improper”. It makes the conversation not protected. The employee could then rely on the conversation to bring an unfair dismissal claim.

Employee brings a grievance

An employee who believes they are subject to unwarranted criticism, as part of a “protected conversation”, can bring a grievance.  The employer must address this criticism, or risk a constructive (unfair) dismissal claim.

What if the employee’s grievance isn’t upheld and the employee resigns and claims constructive unfair dismissal. It is not clear if the legislation prohibits the tribunal from considering the background as to why the grievance was brought.

Limited to some unfair dismissal claims

The new rules just govern some, but not all,  unfair dismissal claims. The rules do not cover pre-termination conversations in respect of

  • “Automatic unfair claims”, e.g. whistleblowing;
  • Breach of contract claims;
  • Discrimination claims.

Employers have a real problem. It is often unclear what claims an employee might advance, when being terminated.

Most likely, employees will add another claim, e.g. a discrimination claim, to their “ordinary” unfair dismissal claim. The employee can then use the conversation in evidence for both claims: the additional  and the unfair dismissal claim.

A wasted opportunity

The new rules may be useful and achieve an early settlement in some straightforward circumstances. However, the exceptions to the protected conversation rules are wide. Employers should not rely on the protected conversation route from the outset.

Employers should attempt to get the employee to acknowledge a dispute before discussing departure terms. It is tried, tested although sometimes artificial. However, if an employee is seeking to rely on a conversation that has already happened, the new rules might just prevent the employee using the conversation.