Protected Conversations

For independent legal advice from specialist employment law solicitors on settlement agreements and protected conversations, call Cambridge Legal on 01223 776200 or email enquiries@cambridgelegal.co.uk

Danger: Protected Conversations

Protected conversations under section 111A of the Employment Rights Act 1996 are dangerous. Employers rely on the legal protection that protected conversations ostensibly provide, but are frequently unaware of the pitfalls. Employees are often at a significant disadvantage when taken by surprise by an employer requesting or imposing a protected conversation to discuss termination of employment. Our experience is that bad employers exploit protected conversations as a means of covering up unlawful conduct. Equally, better intentioned employers leave themselves open to employment tribunal claims by not understanding the limitations of protected conversations. Few employees know what protected conversations are. By their nature, protected conversations frequently come out of the blue. Employees are often confused about their legal rights and worried about their future.

What is a protected conversation?

A protected conversation is a description covering settlement negotiations designed to terminate an employee’s contract. A protected conversation can continue over a number of days. It can be initiated by either the employer or employee. Most frequently a protected conversation takes place when the employer approaches the employee.

A protected conversation often takes place when there is no existing dispute between employer and employee. Sometimes a protected conversation accompanies or precedes disciplinary or capability proceedings. The employer’s intention is generally to avoid having to go through lengthy proceedings designed to terminate the employee’s contract. It’s a quick way of getting to the employer’s desired outcome.

The employer might want to terminate the employment contract in circumstances where there is not a sufficient reason for a fair dismissal. If the employee agrees to leave under the terms of a settlement agreement there will be no risk to the employer of being sued in employment tribunal for unfair dismissal or for anything else. In an ideal situation both parties will be satisfied and the employment relationship will have terminated by mutual agreement.

Why are protected conversations needed?

The coalition government introduced protected conversations in 2013 by adding a new section, 111A, to the Employment Rights Act 1996. The existence and content of protected conversations were not to be disclosed in employment tribunal. The idea was that an employer might want to discuss ending an employee’s employment without the fear of the discussion, including any settlement agreement offer, later being disclosed as evidence in employment tribunal and prejudicing the employer’s case. In theory, a protected conversation enables an employer to offer an employee money to leave without risk.

Approaching an employee and offering her money to leave could lead to her resigning and claiming constructive unfair dismissal based on the employer’s breach of the implied term of trust and confidence or anticipatory breach of contract. Even if she did not resign but was later dismissed, she could argue that dismissal was predetermined and the subsequent dismissal was unfair. Apart from the employer’s approach being seen unfavourably by an employment tribunal, few employers would want the public and other employees to know confidential details of the settlement offer. Settlement agreements are usually highly confidential. Most employers would also want conversations leading to settlement agreements to be confidential. Protected conversations were intended to make discussions leading to termination confidential and to prevent them being used as a ground for constructive dismissal. That was the hope.

Failed protected conversations

A protected conversation might not lead to a binding settlement agreement. If the employment relationship was entirely satisfactory there would be no need for settlement negotiations and a protected conversation in the first place. By the nature of the situation it is possible that the protected conversation could lead to a serious dispute. In the worst cases the employer is taken to employment tribunal.

There are a number of causes of action in employment tribunal including discrimination, wrongful dismissal (non-payment of notice pay), whistleblowing (public interest disclosure) and other forms of automatic unfair dismissal. The employer may have no idea of the potential claims the employee is able to bring out of the protected conversation. The protection of a protected conversation only applies where the claim is for unfair dismissal. The scope of protection is narrow. Many employment tribunal claims involve combinations of complaints such as unfair dismissal and discrimination. The protection only applies to the evidence concerning unfair dismissal. It will not cover discrimination in this example. In such a case the employer will have limited protection from the protected conversation.

Improper behaviour during a protected conversation is another more obvious failure. If an employment tribunal believes that anything said or done in the pre-termination negotiations was improper, or connected with improper behaviour, evidence of the protected conversation can be excluded only to the extent that the tribunal thinks just. In other words, the protection cannot be relied upon and the tribunal may consider full evidence of the protected conversation.

Good practice and protected conversations

The ACAS Code of Practice on Settlement Agreements sets out good practice for the protected conversation. Here is a link to the Code of Practice. https://www.acas.org.uk/code-of-practice-settlement-agreements/html

The Code of Practice on Settlement Agreements gives guidance on what might be considered improper during protected conversations. It gives a non-exhaustive list of examples. Improper behaviour includes:

● Bullying and intimidation

● Discrimination

● Putting undue pressure on the other party, such as the employer not allowing reasonable time for consideration of an offer (10 calendar days is recommended as a minimum) or telling the employee that she will be dismissed if she refuses the offer, or the employee threatening to damage the employer’s reputation (except where that would be legitimate whistleblowing).

There is a fine and treacherous line between encouraging an employee to accept a settlement offer rather than continuing or starting the disciplinary process and, on the other hand, improper behaviour. As there is always likely to be an element of undue pressure in settlement negotiations, the employer cannot be sure that the protected conversation will go the way intended and that the employee will not perceive it as harassment. It may not surprise you that a number of employers are not particularly subtle in describing the likely outcome if the employee doesn’t accept the settlement offer.

One of our clients was told by his employer that if he did not accept the settlement offer “dismissal” would be mentioned in future references as the reason for the termination of his employment contract. This appeared to be a threat amounting to improper behaviour. Significantly, this “kiss of death” to our client’s future employment prospects also indicated that the dismissal was a foregone conclusion because the capability process was ongoing at the time of the threat. Would it surprise you to know that the employer in question employs approximately 1,000 people, operates internationally, and has a dedicated HR Department? Protected conversations can be used abusively.

“Men in business are in as much danger from those that work under them, as from those that work against them.” George Savile, Lord Halifax