In short, not a lot really until we find out how the courts explain how this works in practice. Prior to the introduction of protected conversations or pre-termination negotiations as they referred to in legislation, employers relied upon without prejudice conversations to talk to employees about terminating their employment. In simple terms, without prejudice means that both parties understand and agree that the content of any discussions or correspondence cannot be relied upon in court or tribunal against either party (unless it is agreed between the parties). For without prejudice to apply to such discussions, the following criteria must be satisfied:
- It is clear to the parties that the negotiations are without prejudice
- The parties are attempting to settle a genuine existing dispute
Obviously the without prejudice rule cannot be abused. The government recognised that in some cases, the employer will wish to have a termination discussion before a genuine dispute has arisen, when the without prejudice rule will not apply. Accordingly, on 29 July 2013, the government brought into force Section 14 of the Enterprise and Regulatory Reform Act 2013 which seeks to allow pre-termination negotiations in certain situations where a dispute has not arisen without fear of such negotiations being referred to in a tribunal in cases of ordinary unfair dismissal.
What do pre-termination negotiations mean?
It is important to note that negotiations are required for the protection to arise so, for example, general conversations about an employee’s performance are not likely to be covered. An offer must be made with a view to terminating the employment on terms agreed between the employee and the employer. The question which arises is how the employer raises such negotiations without breaching the implied term of trust and confidence.
What happens if the employee also alleges other claims such as discrimination or automatic unfair dismissal; are the negotiations still protected?
This remains unclear. The intended purpose of the protected negotiations is to cover cases of ordinary unfair dismissal only. It is possible that we will see the negotiations considered by the tribunals to decide on an employee’s case for other claims and if it is decided that those claims are not founded, the tribunals will then have to imagine they do not exist and not be influenced by them when considering the unfair dismissal case.
Can an employee argue that the negotiations should be admitted in evidence?
Yes, if the employer has behaved improperly. ACAS has produced a Code of Practice on Settlement Agreements (note Compromise Agreements are now called Settlement Agreements). http://www.acas.org.uk/media/pdf/j/8/Acas-Code-of-Practice-on-Settlement-Agreements.pdf The Code gives some examples of improper behaviour, including: undue pressure; threats of dismissal if the employee does not agree to terms; discrimination; harassment etc. It is not difficult to conclude that an employee who has been dismissed after refusing an offer to settle is likely to perceive the offer as improper behaviour and want to refer to it in court. What constitutes improper behaviour is likely to take up a lot of the tribunals’ time in preliminary hearings. While the ACAS Code of Practice gives some pointers on handling pre-termination negotiations, there is little concrete guidance. In addition, since an employee can argue improper behaviour and the very fact of offering an employee an offer to leave is unlikely to be well received, it is not hard to conclude that these pre-termination negotiations should be made with caution. The without prejudice rule is still going to be an employer’s better friend. No employer is going to want to be involved in the test case on what constitutes improper behaviour!