What is a ‘protected conversation’?
Where there is no existing dispute, an employer (or employee) can make an offer in the form of a ‘protected conversation’ to end the employment relationship on agreed terms, on a confidential basis, and that offer cannot then be used as evidence in an ordinary unfair dismissal claim to an Employment Tribunal.
Protected conversations may also be referred to as pre-termination negotiations.
The rules regarding pre-termination negotiations are governed by section 111A of the Employment Rights Act 1996 (“ERA”) and are underpinned by a statutory Code of Practice produced by Acas.
The protection around confidentiality and admissibility in Court or Tribunal proceedings that is afforded by section 111A ERA will only apply to offers made or discussions held:
- Before an employee’s employment terminates;
- Where there is an intention for the employee’s employment to terminate on agreed terms; and
- Where there is no current dispute between an employee and their employer (for example, an existing or potential Employment Tribunal claim).
The rules relating to protected conversations are subject to important exceptions and will only apply where the above mentioned conditions are satisfied. In particular, the protection does not apply if an employee’s employment has already been terminated and/or there is already an existing dispute between an employee and their employer.
In these circumstances, it is still possible for settlement discussions to take place between an employee and their employer, but on a ‘without prejudice’ basis.
To summarise, where there is a dispute (for example, where legal proceedings are contemplated or have begun), a ‘without prejudice’ conversation can take place. Things said by one party to another in a ‘without prejudice’ conversation cannot be used as evidence in future legal proceedings (i.e. they are effectively ‘off the record’) as long as they are said for the purpose of a genuine attempt to reach a compromise or settle a dispute.
The protections around confidentiality and admissibility in Court or Tribunal proceedings that are afforded to without prejudice conversations are not limited to only ordinary unfair dismissal claims, like protected conversations are. The without prejudice protections extend to a wider category of employment-related claims, including automatic unfair dismissal, discrimination, and whistleblowing.
How should a protected conversation be conducted?
Acas’ Statutory Code of Practice and related guidance sets out a number of recommendations for employers who wish to enter into a protected conversation with an employee. These include:
- Providing reasons for the making of the offer to an employee;
- Giving an employee a reasonable period of time to consider the proposed agreement (generally speaking, a minimum of 10 calendar days to consider the proposed formal written terms of a settlement agreement unless otherwise agreed between the parties);
- Holding any meetings to discuss a proposal face-to-face and agreeing on arrangements for that with an employee in advance; and
- Potentially allowing an employee to be accompanied by a colleague or trade union representative to such a meeting to help support the employee and progress those discussions.
Are there any consequences if my employer behaves improperly during a protected conversation?
Potentially, yes.
The way that an employer conducts itself in the way it presents an offer to an employee and the options available should not result in the employee being subjected to undue pressure or improper behaviour. The Acas Code of Practice refers to the following as examples of improper behaviour:
- Any discrimination, harassment, bullying, or intimidation;
- Verbally or physically aggressive behaviour; or
- Putting undue pressure on an employee (for example, by not giving them reasonable time to consider an offer or threatening to dismiss an employee if they do not accept an offer).
If an Employment Tribunal decides that conduct was improper, the relevant protected conversation may lose some or all of its protection and may be capable of being used as evidence in an ordinary unfair dismissal claim in an Employment Tribunal.
Do I have to accept an offer made during a protected conversation?
The simple answer is no. If an employee is not happy with the terms that their employer has offered, then they can either:
- Reject that offer and continue in employment. This might mean their employer starts or continues to subject that employee to an alternative internal process; or
- Put forward a counter offer for their employer to consider, including but not limited to asking for an increase to the amounts due to be paid to them. An employee should be aware that in rejecting their employer’s offer, there is a risk that their employer may withdraw from negotiations completely.
I have accepted an offer made during a protected conversation. What happens next?
Once an employee has indicated their acceptance of an offer in principle, an employer should arrange for either a settlement agreement or Acas COT3 agreement to be prepared, formally setting out the terms that have been agreed upon.
The effect of a settlement agreement and Acas COT3 agreement are largely the same and usually contain very similar provisions; they provide an employee with compensation for the loss of their employment and, in return, the employee waives their rights to pursue a legal claim against their employer relating to their employment and/or its termination.
The key difference between the two types of agreement is that an employee must obtain independent legal advice on the terms and effect of a settlement agreement and its effect on the employee’s ability to pursue any complaint before an Employment Tribunal in order for that to be binding. It is customary (although not obligatory) for an employer to contribute towards an employee’s legal fees in obtaining that advice.
What are the benefits of agreeing on terms during a protected conversation?
Agreeing to end an employment relationship on agreed terms can be in the interests of both parties, as it provides the employer with the comfort that they will not face any claim and the employee with a financial settlement that should provide some comfort and security to help them move on with their life and career.
In agreeing terms, parties also avoid any stress, uncertainty, and delay of a Court or Employment Tribunal process.
Comment
The difference between a protected conversation or without prejudice conversation and the protections afforded by each can be quite complicated in practice and employers and employees would be well advised to seek advice on the most appropriate avenue to embark on in their circumstances.
If you have made an offer to an employee, or received an offer from your employer, we can advise you on the options available to you and assist you with handling any negotiations. This might be particularly helpful in situations where complex entitlements are involved and an exit includes issues relating to directorships, shares, bonuses, intellectual property or post-termination restrictive covenants.
Lastly, if terms have been agreed and you require advice regarding any settlement agreement, we can provide the necessary legal advice in order for that to be binding.
This article is for information only and does not constitute legal/financial advice. Please contact us for advice tailored to your specific position. Some of the content presented on our website has been generated with the assistance of Artificial Intelligence (AI). We ensure that all AI-generated content meets our high standards for accuracy and relevance.
