In July 2013 the law was amended with the intended effect that employers and employees would be able to enter into negotiations about the proposed termination of an employee’s employment, without such conversations being admissible in any subsequent ordinary unfair dismissal proceedings. The main difference to the situation before July is that previously there had to be a dispute, grievance, disagreement or similar before an employer could have an ‘off-the-record’ conversation (or ‘without prejudice’) now an employer can start a conversation with a view to ending a person’s employment where there has been no previous dispute or issue with that employee’s conduct, capability or the viability of the role.
This sounds like good news for employers.
However there are 4 things to get right to ensure the intended consequences are achieved
1. Being clear on the situation the employer faces before having this conversation.
These conversations are most likely to happen for performance-related dismissals, relationship breakdowns and senior manager exits when relating to ordinary unfair dismissal claims.
Protected conversations cannot be used for complaints of dismissal due to, for example, whistleblowing, union membership health and safety or treatment related to discrimination, harassment, victimisation or a breach of contract or wrongful dismissal. In other words protected conversations only apply to potential unfair dismissal situations. An employer will therefore have to be particularly careful if they start a protected conversation for a performance issue in good faith and then the employee alleges discrimination or victimisation etc
2. Conducting the conversation appropriately
Employers might feel they have a cast iron case for having a protected conversation. The employee, on the other hand, may not respond in the way the employer expects. The employer, taken aback, might resort to ‘improper behaviour’. ACAS provides a non-exhaustive list of what this means. Some examples are:
- Harassing, bullying and intimidating an employee through for example the use of offensive language
- Physical assault starting from finger pointing, shouting , aggressive language or invasion of personal space
- Discrimination through one of the protected characteristics
- Putting undue pressure on the employee by, for example, imposing tight deadlines or saying that if a settlement proposal is rejected then an employee will be dismissed
Looking at the list an employer might think they would never resort to this behaviour. Rationally that might be the case. Our experience suggests that this can be an emotional conversation so at the very least plan what you are going to say and rehearse it with an adviser. And dont forget that what an employer thinks is just gentle persuasion will often sound very different when an aggrieved employee puts their own spin on this in a Tribunal some 3 months or more later
3. Following up appropriately
It is a negotiation so agree what has been agreed and re-convene to discuss the areas that are still to be agreed. By all means set some reasonable deadlines for the negotiations to be agreed by. Employees will usually respond well to there being a boundary in place to provide some certainty. On the other hand, setting very tight deadlines, are likely to be seen as aggressive and get in the way of having a mutually agreeable outcome.
The outcome of a protected conversation is typically a settlement agreement. The ACAS Code suggests a minimum of 10 calendar days being offered to employees to consider the proposed terms of a settlement agreement and to receive independent advice. We would suggest that you keep talking as long as there is a reasonable prospect of achieving your desired outcome ie a no-fuss termination. This may mean an extra few days of pay but in general it will be worth it.
4. Safety first – tying it all up in a settlement agreement
The new name for the old compromise agreement, settlement agreements are to prevent employees from exercising their right to make a claim to a Tribunal post-termination. The settlement agreement will highlight the agreed terms on which the employment relationship will end.
Given that a settlement agreement has to be signed by the employee’s legal adviser, the lawyer will be looking at the contractual entitlements as well as advising the employee as to whether the terms are fair or could be improved. The terms of a settlement agreement are always likely to be more generous than an employee’s contractual entitlement otherwise there is no incentive for the employee to agree. The employer is also effectively buying out the costs of going down a lengthy disciplinary or capability process in the interests of a speedy resolution.
Contact firstname.lastname@example.org for a confidential discussion around any of the points raised. Alternatively contact him on 07974 425 361.
Posted by Stephen Cowburn