What you need to know about protected conversations

What is a protected conversation?

The Employment Rights Act 1996 provides legal protection which allows an employer, in certain circumstances, to approach employees to have a conversation regarding how their exit from the business might be managed.

An employer may choose to take this approach to avoid going through a formal disciplinary or performance management process. This might also be the best course of action if there are misconduct issues with an employee and the employer wishes to avoid the risk of any potential claims at the point of dismissal being brought at the Employment Tribunal. In situations of this nature, the pre-termination conversations and draft settlement terms are “protected” in law.  This means that these conversations may not be referred to in any ensuing Employment Tribunal proceedings for unfair dismissal.

Two women having a protected conversation.

When does protection not apply?

Legal protection does not apply in the following situations:-

  • Automatic unfair dismissal where the usual two-year’s qualifying criteria are waived. Relevant examples of this would be dismissals due to whistleblowing or after asserting a statutory right;
  • Discrimination, harassment, victimisation or other prohibited treatment under the Equality Act 2010;
  • Breach of a contract or wrongful dismissal.

So what makes a conversation protected?

In order to attract legal protection, there must be no “unfair” or “improper behaviour” by the employer. An example of this would be some indication of a pre-determined decision that had already been made by the employer, or evidence of spoken or written threats from the employer that if employees do not accept the offer, they “will be dismissed”.

It is, however, possible to say that the management process will continue in relation to grievances, disciplinary procedures, and performance management as well as sickness or absence management.

The ACAS guide on settlement agreements sets out a non-exhaustive list of examples of improper behaviour by employers.

These include:-

  • All types of harassment;
  • Victimisation;
  • Failure to give sufficient time to consider the terms of the settlement agreement;
  • Discrimination on the basis of age, sex, race, disability, sexual orientation, religion or belief, transgender, pregnancy and marriage or civil partnership; and
  • Putting pressure on an employee to accept a settlement proposal.

It is also acceptable to take an employee to one side and discuss the situation under the veil of a protected conversation. We often hear from employees that such conversations have been “sprung on them”. This is not contrary to the legislation and in fact, this is often the way that such conversations are dealt with.

There is certainly a correct way to conduct these conversations to avoid the veil of protection being lifted. We often advise employers on the correct process to follow to ensure a conversation is protected.

What happens after the protected conversation?

Even though it is not required in law, it is advisable that a letter is sent out to the employee confirming what was discussed and setting out the terms of any offer to leave employment. Any letter or email should be headed ‘Without Prejudice’.  ACAS has template letters which provide a helpful starting point.

Employers are also advised to remember that there is always a possibility that an Employment Tribunal could see the letter for any claims apart from unfair dismissal. It may be helpful to state that the terms of the offer have been made in accordance with the Employment Rights Act 1996.

Often, a draft settlement agreement may be attached to the offer. However, this might be seen by an employee as an indication that the employer has already pre-determined that the dismissal process will proceed. As an alternative, the main headline terms of the offer could be presented and if the employee expresses an interest in accepting them, a settlement agreement can then be provided.

Feel free to contact our solicitors for legal advice if you need further guidance in relation to protected conversations and settlement agreements.

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