Having that “difficult” conversation at work – “without prejudice” privilege and section 111A ERA 1996 – Part II
Our previous blog https://www.archonlaw.co.uk/2016/10/03/having-that-difficult-conversation-at-work-section-111a-era-1996/ explained that under s.111A ERA 1996, employers could have “protected conversations” with employees regarding the termination of employment without the nature or terms of the discussions being referred to within any subsequent unfair dismissal proceedings even if agreement is not reached. These talks can include discussing the termination of employment (by agreement) even where there is no dispute in existence.
This blog expands on the topic further in respect of:
- How to balance “protected conversations” with the “without prejudice” rule, and how, using either or both of these rules, an employer can have an “off the record” conversation with an employee.
- Practical guidelines on actually holding the conversation.
What is the without prejudice (“WP”) rule?
The WP rule is a mechanism that encourages parties to settle their disputes out of court or tribunal. It generally prevents offers or concessions (verbal or written) from being put before the court or tribunal as evidence of admissions against the interests of the party that made them. It is effective as long as the statements are made in a genuine attempt to settle an existing dispute and there is no “unambiguous impropriety” such as unlawful harassment or discrimination in the course of the communication. It is not limited to unfair dismissal claims.
For communication to be protected by the WP rule, it is not necessary for them to be labelled as being “without prejudice” – and a communication labelled “without prejudice” which is not a genuine attempt to settle an existing dispute will not be protected. However, it is good practice to label as “without prejudice” written communications intended to be covered by the WP rule and to seek agreement at the start of a meeting or telephone call that the contents of the meeting or telephone call will be treated as being “without prejudice”.
It is also advisable to keep WP communications separate from other (“open”) communications. Otherwise, there is a risk that the WP parts of a communication will be inadvertently disclosed to the court or tribunal along with the “open” parts.
Problems with WP
The major problem with the WP rule is the requirement that there must be an existing dispute between the parties, unlike with protected conversations. There will be an existing dispute where a claim has already been issued. A further example would be where formal grievance or disciplinary proceedings are already in progress or there is at least a disagreement known to both the employer and the employee that could lead to litigation between them.
However, in many cases, an employer may wish to initiate a conversation when there is no dispute. In those circumstances, the WP rule cannot apply and any “off the record” conversation will be admissible in proceedings before the tribunal except to the extent (if any) that it comes within the “protected conversation” rule.
For example, the WP rule alone will not be effective where the employer believes the employee is underperforming and expresses the view (without any prior performance management process or warning to the employee) that the employment will have to be terminated under a settlement agreement. This is likely to mean that evidence of the conversation will be admissible in the tribunal, despite the offer of a settlement agreement.
Crucially, this means that the WP rule is unlikely to be effective in situations where concerns are presented to an employee out of the blue. However, it may be possible for the employer to initiate an open discussion, or a formal process, about the issues in dispute (such as performance or conduct) and to commence WP discussions after a contradictory response has been received from the employee.
Combining “without prejudice” and protected conversations
As we have seen in the previous blog, the main disadvantage of the protected conversation regime is that it only applies to unfair dismissal claims. The main advantage is that (unlike the WP rule) it does not require an existing dispute.
Fortunately, the disadvantages of both regimes can, at least to some extent, be cancelled out by combining the two. To achieve this can be a little cumbersome, as it is advisable to label all conversations and communications as being both “without prejudice” and part of a “protected conversation” under s.111A of the Employment Rights Act.
In view of the limitations of both regimes, it will often be advisable to seek to ensure that there is evidence of an existing dispute, as suggested above, before initiating the WP/protected conversation.
All situations are different and present their own particular challenges. Employers wishing to initiate difficult conversations about termination of employment may wish to consider the following practical tips:
- It is almost always best to be deal with these issues face-to-face and in person. Video and telephone calls have their place, but it is much easier to get a message across in a humane way and to deal with the range of potential emotional responses if you are present in the room together.
- Even in a WP/protected conversation, it is often advisable not to state that a final decision on termination has already been made. Being presented with a final decision out of the blue is likely to be shocking to the employee and may result in an angry response. The protected status of the conversation may also be challenged, leaving the employer potentially exposed.
- Emphasise the benefits to the employee of reaching an agreement, such as being able to move on, with a favourable reference and a financial cushion.
- If possible, while being frank about the problems that have led to the discussion, emphasise the positive contributions that the employee has made to the organisation.
- Allow the employee time away from work for reflection and to be able to take advice. It is usually advisable to avoid breaking the news on a Friday afternoon, as it may be difficult for the employee to contact advisers over the weekend. The ACAS guidelines on protected conversations http://www.acas.org.uk/media/pdf/j/8/Acas-Code-of-Practice-on-Settlement-Agreements.pdf recommend allowing at least 10 days to consider the terms of the offer. In our experience, it is preferable to engage in discussions on a faster timescale than that, without imposing unreasonable deadlines for final agreement to be reached.
- Consider in advance whether the employee should be given the opportunity to be accompanied to the initial meeting by a colleague (or, in unionised environments, a trade union representative). The ACAS guidelines recommend this, but in our experience is it often difficult to achieve in practice, particularly where the employee is not fully aware of the nature of the conversation in advance.
- Consider in advance whether any other support should be put in place for the employee after the initial meeting, particularly if the employee is considered to be in any way vulnerable. For example, is there a colleague who could be asked to contact the employee (if this is agreed) to provide moral support?
- Consider in advance whether there are suitable independent employment lawyers who could be suggested to the employee. It will be for the employee to choose his or her own adviser, but it can be helpful to have suggestions.
- Consider in advance how to deal with the initial absence of the employee from work, both in relation to internal and external communications.
Settlement is more likely if parties can speak freely, aware that what they say (including any admissions) cannot be used against them should the settlement discussions fail. Parties are also more likely to settle if they are free to put all their cards on the table. Hopefully, an understanding of s.111A and WP and how to take matters forward will facilitate this.
by Darab Khan