Protected Conversations – Are they safe?

From 29th July 2013 it will be possible for employers and employees to enter into discussions to end employment on a confidential basis.  These changes are intended to address the difficulty for employers that they cannot have “off the record” discussions with an employee unless there is an existing dispute between them.   Where the issues are ones of performance or absence or “fitting in” employers do not want to create a dispute.  Although well intentioned, this change in the law may create more problems than it solves.

The main problem with the new law is that it only prevents the use of the discussions in cases of Unfair Dismissal.   The discussions could still be used in a claim based on Discrimination, or one of the grounds where a Dismissal is Automatically Unfair.   They will also be admissible in a claim for Unfair Dismissal if there is “improper behaviour” which includes bullying and victimisation, or putting undue pressure on a party.  The gloss that it must include (but not be limited to) “unambiguous impropriety” isn’t that helpful. Exactly what will be regarded as improper behaviour will doubtless be fought out before the Employment Appeal Tribunal.

ACAS have issued a Code of Practice on Settlement Agreements and discussions. That is not statutory but is guidance on good practice, and failing to follow it may be “improper behaviour”.   This includes the requirement for a “reasonable period of time” to consider any proposed Settlement Agreement, which ACAS say should be 10 calendar days “as a general rule”, and that if there are to be face to face meetings that the employee should be allowed to be accompanied; similar to the rights they have to be accompanied at Disciplinary Hearings.

There remain many pitfalls even for the well intentioned employer.  Employers wanting to use this procedure are likely to need legal support.   They will want to be sure that there are no circumstances from which the employee involved in such a process might plausibly raise any claim for Discrimination, either direct or indirect.   They will also want to ensure that the process follows the ACAS guidance and that it cannot plausibly be alleged that any part of it amounts to “improper behaviour”. Employers will also need to consider what the Employee should do during any period when they are considering a proposed Settlement Agreement; can or should they be suspended or put on Garden Leave, and does the employer have the right to do that?

Finally, even if an agreement is reached for it to be enforceable against the employee it must still be in the form of a Compromise Agreement (to be renamed ‘Settlement Agreement’) on which the Employee must have independent advice and which must meet the statutory criteria contained in s.203(3) Employment Rights Act 1996.  Employees will expect employers to pay for the cost of such advice. It appears that the proposal to produce a Model Settlement Agreement has been dropped, and in any case it is likely that such model agreements would need to be edited to take into account the specific circumstances of each individual case.

See here for the ACAS Code of Practice

For advice please contact Neil Howlett or Andy Hambleton.