Guide to off the record or protected conversations

Introduction

Frequently managers find themselves frustrated by formal processes and spending lots of time dealing with a problematic member of staff, and wanting to just ‘cut to the chase’ and bring the employment to a clean end so that all parties can move on.

Often this would be beneficial all round, but clearly there are legal risks to having those sorts of conversations. There are two mechanisms which enable employers to enter into discussion of this nature – the ‘without prejudice’ common-law principle, and the concept of ‘protected conversations’.

This guide explores the limitations and realities of both, and gives some guidance on how to identify which option to use, as well as how to maximise the chances of a settlement being accepted.

Without prejudice

The ‘without prejudice’ rule is that conversations or negotiations entered into with a view to settling a dispute cannot be used as evidence if the dispute subsequently ends up in legal proceedings. However, this concept is frequently misused, and putting ‘without prejudice’ on a letter or email, or saying that a conversation is ‘without prejudice’ isn’t a get-out-of-jail-free card enabling employers to have ‘off the record’ conversations under that protection whenever they choose.

In fact, the ‘without prejudice’ protection will only apply if the conversations are in respect of an existing dispute. A ‘dispute’ would mean either active legal proceedings, or a likelihood of that. This means that even where an employee has raised a grievance, or is subject to disciplinary proceedings, it may not necessarily count as a dispute.

Protected conversations

The concept of a protected conversation was introduced to enable employers to have these types of discussion even where there isn’t a formal dispute.

The idea is that by stating a wish to have a ‘protected conversation’, if a legal claim were to later arise, the existence and nature of the conversation couldn’t be part of evidence in that claim.

Unfortunately, the scope of protected conversations is limited by a number of restrictions and circumstances where the protection wouldn’t apply, as follows:

Improper conduct

The conversation must be entered into with a view to reaching a settlement. It cannot be used to tell an employee he/she should resign, or to threaten them or put pressure on them, as this would constitute ‘improper conduct’, and would remove the protection.

Risk of grievances

If an employee raises a grievance about (for example) unwarranted criticism during a protected conversation, that grievance would need to be investigated as usual, and if a legal claim arose out of that grievance, it is possible the details of why the grievance was raised will come out anyway.

Limited to unfair dismissal claims

The protected conversation regime only offers protection in the context of ‘routine’ unfair dismissal claims. Any other claims, including breach of contract, discrimination, automatic unfair dismissal, unlawful detriment, are not included. This means that unless you are absolutely sure the employee could not possibly bring anything other than a straight unfair dismissal claim, there is a risk the protection will not apply and the details of the conversation could be used. If an employee raises issues of (for example) discrimination or whistle-blowing during the protected conversation, the whole conversation will no longer be protected.

Options

It is clear that both ‘without prejudice’ discussions and protected conversations are limited and involve risks. Which approach is appropriate will depend on the circumstances and potential claims involved, and you should always seek professional advice before entering into these discussions in order to ensure you are fully aware of the risks and can make the best choice to protect your business.

However, part of making a decision about when and how to have this type of off-the-record discussion with an employee is analysing the risk of a claim happening in the first place and the employee’s appetite to bring such a claim. If you are confident the individual is unhappy at work anyway and would be open to leaving, and you have a reasonable budget to make a good payment in a settlement, then the probability of the situation ending in a legal claim is low, and you may decide that even if technically the conversation might end up not being protected, it’s worth having that conversation anyway.

If you offer enough that the employee takes the settlement, it won’t matter.

Increasing the likelihood of acceptance

If you want to have this kind of conversation and are aware that the protection may not apply, you need to ensure it takes place in circumstances where the employee is very likely to accept.

Even if there is not an existing dispute, an individual is always far more likely to accept an offer to terminate with a settlement agreement if they can see clearly that the alternative is less attractive. If there is literally no context at all, no performance management in progress, no concerns having been raised, no disciplinary procedure underway or anything similar, the employee is far less likely to accept. Whereas the employee will be more minded to accept if:

• They are already feeling uncomfortable at work due to a performance management or disciplinary process which is underway
• They can clearly see that with a bit more time, the chances are in due course the employer will be able to terminate their employment anyway
• They realise that if they stay, things like a good reference will be in jeopardy.

If you offer a settlement to an employee completely out of the blue, and they seek legal advice about that settlement, they will be advised that their employer is at least several months away from being able to terminate their employment lawfully, so the amount needed to persuade that employee to settle will necessarily be higher.

Checklist before going ahead

Here are six things to think about before entering into an off-the-record discussion with a member of staff:

1. Take professional advice before you go ahead
2. Identify whether there is an existing dispute
3. Consider the context and think about at least starting a performance management/disciplinary/redundancy process before entering into a conversation so that the employee can see where things are heading
4. Try and get the employee to acknowledge that there is a dispute if you can, to ensure ‘without prejudice’ protection
5. Analyse how likely you think the employee is to accept an offer
6. Assess the likelihood of the employee bringing a claim. This doesn’t just include whether there are any legal vulnerabilities, it also includes the personality and circumstances of the individual involved.

Conducting the conversation

Once you’ve identified that you are going to have a frank discussion with an employee, many managers don’t quite know how to actually start the process. Here are some practical tips to make sure you achieve what you need while protecting yourself.

Explore first

Ask the employee if, in the context of whatever ongoing formal process is in place, they’d be open to discussing alternatives. If they are open to the idea, don’t leap in with a proposal or a pre-written agreement, arrange a meeting separately.

At the meeting

Allow the employee to bring a colleague with them, or a union official if they are a member of a union. You don’t have to do this, but it would be sensible to.

Also ensure you are accompanied, by another manager or by an HR professional. You will then have a witness should you need one.

State that the meeting is a protected conversation under section 111A of the Employment Rights Act, and is also being conducted on a Without Prejudice basis.

As outlined earlier in this guide, it may be that one or other of these may not actually apply, but it is sensible to make sure your intention that the conversation is a protected one is clear.

Explain to the employee that you are proposing to offer them a settlement with a view to ending their employment amicably.

Tell them any financial settlement you are proposing and also explain any other elements of the offer which are relevant, such as a reference, or no requirement for them to work out their notice.

Make sure the employee is clear that the proposal is entirely optional and they are under no pressure to accept, whilst also outlining what happens if they choose not to accept (i.e. that the formal process you are currently undergoing will continue).

Don’t pressure them, threaten them or do anything else which may constitute improper conduct.

Offer them the opportunity to go home and take some paid leave while they consider and take advice on your offer.

Do not compel them to do so unless you feel the business is significantly at risk if they remain at work.

Ensure they are given a reasonable period of time to consider the offer, usually 10 days, and that they are notified that you will pay reasonable legal fees for them to seek advice on the terms of the settlement.

After the meeting

Follow the discussion up in writing marked ‘Without Prejudice and subject to S111A Employment Rights Act 1996’, either with a draft settlement agreement, or stating that if they want to proceed, a draft agreement will be issued to them.

Even if they are staying off work, unless you feel the business would be significantly harmed, don’t do anything which might look like pre-empting that their employment will end, like removing email access or similar. If the deadline expires and the employee hasn’t responded, instruct them to return to work, and carry on with whatever formal process you have ‘paused’.