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The scope of protected conversations

By way of reminder, pursuant and subject to section 111A of the Employment Rights Act 1996, an employer can open discussions with an employee about the terms on which the employment might terminate by mutual agreement, without facing accusations that the conversation itself is grounds for a claim of constructive unfair dismissal.  
 
Such a conversation needs to be thoughtfully planned and managed but if handled correctly, cannot be used as evidence in an unfair dismissal claim, provided that there has been no “improper behaviour” during the course of the discussion.  Note that this exclusion from evidence only applies in relation to “ordinary” unfair dismissal claims.  If relevant, the conversation could be used in other types of claims, e.g. discrimination claims or automatic unfair dismissal claims.
 
This facility came into force in 2013.  But there have been no appellate decisions relating to it which might give guidance as to it’s full parameters and use, until this year.
 
In the case of Faithorn Farrell Timms LLP v Bailey, the employee “B” was a secretary.  As a result of the introduction of a requirement to move from part time to full time working, she initiated a conversation with her employer about leaving.  Negotiations ensued but were unsuccessful.  B then resigned, claiming constructive unfair dismissal and indirect sex discrimination.  In subsequent correspondence both the employer and employee made reference to the pre-termination settlement discussions.
 
The employee then made reference to the pre-termination discussions as part of her particulars of claim to the Employment Tribunal.  The employer defended the claim and also made references to the discussions in its defence.  Neither party at that stage asserted that the discussions were inadmissible as evidence in the claim of unfair dismissal.
 
At an interlocutory stage, the question arose as to what was and was not admissible for the purposes of the unfair dismissal claim in light of section 111A.  The findings of the Employment Judge on that question was appealed to the EAT.  The keys points to note from the EAT’s judgment in relation to the application of section 111A are that:
  • Potentially inadmissible pre-termination discussions are limited to offers made or discussions held before termination with a view to employment being terminated on agreed terms.
  • The fact that such discussions have taken place is inadmissible in an ordinary unfair dismissal claim;
  • The content of such discussions as between the employee and employer is inadmissible in an ordinary unfair dismissal claim;
  • Internal discussion of such negotiations within the employer organisation as between relevant managers and HR, is also inadmissible.  
  • Whilst both parties had extensively referred to the discussions in open correspondence, this could not be considered as a waiver of the protection afforded by section 111A as the section does not allow for waiver.  The discussions would only become admissible if there had been improper behaviour within such discussions.  
There are obvious difficulties with the application of section 111A in any event.
 
One such difficulty is the fact that the rules on exclusion of evidence under section 111A and under other forms of privilege such as without prejudice privilege differ, resulting in a potentially complex analysis of what can and cannot be used in Tribunal proceedings and in what context.
 
Furthermore, a judge is expected to be able to separate the evidence and disregard such discussions for an unfair dismissal claim, even though the judge would be required to have regard for it in any other type of claim such as the sex discrimination claim brought by the employee in this particular case.  In reality a judge surely cannot avoid being influenced by the evidence of such discussions if it comes before him or her.
 
Nevertheless, section 111A gives greater flexibility to employers and employees to find an amicable way out of an unsatisfactory employment relationship as compared to the position before its introduction.  It is useful to have from the EAT some guidance as to its application.
 
For further information on the issues raised in this article, please contact us on 020 7925 8080 or by email at info@spencer-wyatt.com.

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