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Having an off the record conversation

Published 27 September 2016

There are situations as an employer when you may want to have an “off the record” conversation with one of your employees, but are nervous, because sometimes those conversations can go wrong and can come back to bite you.

You might want to hold this type of conversation when it becomes clear that someone within the business is no longer right person for the organisation and this could be for a multitude of reasons.

Those reasons could be a break down in the relationship, loss of trust in their performance, they’re just not the right fit any longer or it could be more serious, where it could lead to some kind of formal disciplinary or performance related action.

In my experience as a trade union representative, it is often better to have a frank and honest conversation early on, rather than battling through some kind of disciplinary or performance process, which can be protracted at times, very stressful and can cost more in the long run with management time and resources involved to do it properly.

So when are these conversations protected?

There are two types of protected conversations as far as the admissibility of settlement offers and ‘off the record’ conversations in proceedings before an Employment Tribunal. These are regulated by:

  • the ‘Without Prejudice’ rule
  • Section 111A of the Employment Rights Act 1996 [1] (an amendment to the 1996 Act introduced in 2013)

The ‘Without Prejudice’ rule

‘Without Prejudice’ is a common law principle, which has been developed by Judges through the courts system [2] and in the context of the workplace, it allows employers to have ‘off the record’ discussions with their employees about the proposed termination of their employment. These discussions cannot then be used in legal proceedings.

The important point is as long as the ‘without prejudice’ rule applies, employees cannot refer to the ‘off the record’ conversations to show, that they have been forced  out of their job or that the disciplinary and subsequent dismissal process, was predetermined and a sham.

Now in order for a conversation between employer and employee to be protected under the ‘without prejudice’ rule there must be:

  • An existing dispute between the parties, BNP Paribas v Mezzotero 2004 IRLR 508 [3]
  • A  genuine attempt to settle the dispute
  • An agreement to treat the discussions as without prejudice
  • There are no unambiguous impropriety in the conduct of the parties during the settlement discussion, Framlington Group Limited v Barnetson 2007 EWCA Civ 502 [4]

The real disadvantage was that there had to be a ‘dispute’ between the parties, at the time of the discussions and if the existing dispute requirement was not satisfied, then without prejudice rule did not apply and any discussions could be used in any subsequent tribunal.

This limitation would stop any conversation pre any action by the employer even when it was clear that having a conversation may save everyone the time and heart ache in the long run, it could put the employer at risk if things went ‘pear shaped’, and be used as a breach of trust and confidence if it all ended up in a tribunal

Section 111A of the Employment Rights Act 1996

The effect of section 111A is very similar to the effect of the ‘without prejudice’ rule: providing the settlement negotiations and the content of the conversations are protected, they cannot be used in a subsequent unfair dismissal claim. The most important part is that it overcomes the barrier many employers face in not having an ‘existing dispute’ before the employer can start such discussions.

Section 111A does, however, have its limitation and only applies to unfair dismissal and will not apply to claims for automatic unfair dismissal, for example carrying out a trade union activity or whistleblowing.

Also for the conversations to be “protected” and inadmissibility in an employment tribunal there must not be any “improper behaviour” during the negotiating process. What constitutes improper behaviour is up to the tribunal to decide, which will be on the facts and circumstances of each case. However, improper behaviour will include behaviour that would be regarded as ‘unambiguous impropriety’ under the common law rule for ‘without prejudice’ conversations. The ACAS Code of Practice on Settlement Agreements [5] provides a non-exhaustive list of improper conduct, which includes:

  • all forms of harassment, bullying and intimidation, including through the use of offensive words or aggressive behaviour;
  • physical assault or the threat of physical assault and other criminal behaviour;
  • all forms of victimisation;
  • discrimination because of age, sex, race, disability, sexual orientation, religion or belief, transgender, pregnancy and maternity and marriage or civil partnership; and
  • Putting undue pressure on a party (e.g. an employer saying before any form of disciplinary process has begun that if a settlement proposal is rejected then the employee will be dismissed).

Where it has been decided by the tribunal that there has been improper behaviour by the employer anything said or done in pre-termination negotiations will normally be admissible as evidence.

The recent Employment Appeal Tribunal (EAT) ‘Faithorn Farrell Timms v Bailey [6] confirmed the privilege that applies to protected conversations, Section 111A, cannot be waived and extends not only to the content of those protected conversations, but also to the fact of the conversations taking place.

The EAT stated, where there is the existence of another claim, such as a discrimination claim, the tribunal would allow the evidence to be admitted in those claims, but still treat it as inadmissible in the unfair dismissal claim.

Implications for employers

The EAT decision has shown the problems that can arise when negotiations could be covered by both the common law “without prejudice” rule and s.111A.

In regards to the without prejudice rule, there needs to be an existing  dispute before any conversation can even start to take place, which can sometimes be too late as both parties may be entrenched in their position, especially if the employee wants to clear their name.

In regards to section 111A conversations where claims other than unfair dismissal may arise, the situation will need to be risk assessed otherwise the employer may be caught out if things go pear shaped and they may not be protected.

Both can be useful for employers and each have their advantages and disadvantages, it is for the employer to assess which one is the most appropriate for each situation.

  1. Employment rights act1996c. Available at: http://www.legislation.gov.uk/ukpga/1996/18/section/111A (Accessed: 17 September 2016).
  2. Farlex (2003) ‘Common law’, in Available at: http://legal-dictionary.thefreedictionary.com/common+law (Accessed: 17 September 2016).
  3. EMERSON, J. (2004) BNP Paribas v. Mezzotero [2004] UKEAT 0218_04_3003 (30 march 2004). Available at: http://www.bailii.org/uk/cases/UKEAT/2004/0218_04_3003.html (Accessed: 17 September 2016).
  4. (No Date) Available at: https://ids.thomsonreuters.com/sites/default/files/B0831_t01.pdf (Accessed: 17 September 2016).
  5. July 2013 Available at: http://www.acas.org.uk/media/pdf/j/8/Acas-Code-of-Practice-on-Settlement-Agreements.pdf (Accessed: 17 September 2016).
  6. Faithorn Farrell Timms LLP v Bailey (practice and procedure: Admissibility of evidence) [2016] UKEAT 0025_16_2806 (28 June 2016) (no date) Available at: http://www.bailii.org/uk/cases/UKEAT/2016/0025_16_2806.html (Accessed: 17 September 2016).

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