What is a “protected conversation”?
Section 111A of the Employment Rights Act 1996 (“ERA”) enables employers to have confidential, or “protected”, conversations with employees; in circumstances where they wish to explore the option of bringing the employment relationship to an end on agreed terms; without the conversation being referenced in subsequent unfair dismissal claims.
When used appropriately, a protected conversation can be game changing – allowing for frank conversations about employment relationships that aren’t working, avoiding lengthy formal processes, and potentially providing an outcome that is beneficial for both parties.
However, the question of whether a conversation will be protected is subject to a number of important exceptions. The first, is that the protection will only apply in ordinary unfair dismissal claims; it will not apply to any automatic unfair dismissal, whistleblowing, discrimination, victimisation or other types of claims. The second, is that the protection will not apply where either party engages in “improper behaviour”, such as harassment, bullying, discrimination, victimisation or exerting undue influence.
It should also be noted that protected conversations are slightly different to “without prejudice” conversations, though both confer confidentiality (albeit the scope of without prejudice confidentiality is arguably broader), and both can apply to the same conversation. An important distinction between the two, is that for the without prejudice rule to apply, there must be a dispute, and the conversation must be a genuine attempt to settle that dispute. There are also different exceptions to the without prejudice rule; which will not apply where either party engages in “unambiguous impropriety” such as blackmail, fraud or perjury. In short, it is harder to show that a conversation is “without prejudice”, but once you do, it is harder to lose the protection, and the protection applies to all claims (not just normal unfair dismissal).
Whilst it is easy to steer clear of the more extreme forms of improper behaviour and/or unambiguous impropriety outlined above, it’s nonetheless important to ensure that a careful process is carried out when holding protected conversations, so as to avoid “undue influence” and consequently undermining the confidentiality of the conversation.
We set out below some top tips for employers, to help ensure that protected conversations are conducted thoughtfully, fairly, and legally.
Top tips for employers when having a protected conversation:
1. Be strategic about the reason for the conversation and the options available
One of the most critical decisions when planning a protected conversation is how to frame the offer and, just as importantly, the alternative. The offer needs to be attractive enough to engage the employee, but not so generous that it undermines your position or sets an unhelpful precedent. Equally, the alternative must be credible and something the employer is genuinely prepared to pursue.
For example, there’s little value in presenting performance management as the fallback if there’s no real appetite to follow through with it. In such cases, it may be more effective to frame the alternative in broader terms – such as performance management or a breakdown in trust and confidence. This gives greater flexibility in how to proceed if the offer is rejected and, in the right circumstances, can help steer the conversation toward the desired outcome.
This is arguably one of the areas where experience and sound advice make the biggest difference. A well-judged approach can significantly improve the chances of a successful resolution.
It can also be helpful to have an aide memoire for the meeting, drafted in advance, to make sure that you cover all of the points that need to be discussed, and follow an appropriate process.
2. Be clear about the confidential nature of the conversation from the outset
Make it clear at the start that it is your intention that the conversation will be a protected conversation, and (if applicable) without prejudice; ensuring the employee understands that this means that the conversation is confidential and can only be discussed with legal advisers and immediate family.
Obtain the individual’s agreement to having a protected conversation before proceeding.
3. Be careful not to engage in any improper behaviour
The conversation won’t be protected if there’s improper behaviour towards, or undue pressure placed on, the individual.
A protected conversation must therefore always be conducted carefully, respectfully and without unnecessary pressure. Frame the discussion in as factual and neutral a way as possible. Avoid threats and/or presenting the outcome as a foregone conclusion and allow the individual time to process the information and respond to it without feeling intimidated or unduly rushed.
Make it clear that the options that have been presented are alternatives to be explored, and that if the employee doesn’t want to pursue the option of an agreed exit this will not impact any formal process that will follow.
Refrain from taking any steps that would indicate that a decision has already been made, such as suspending the individual, withdrawing access to company systems or requesting the return of company property.
And don’t forget to consider whether reasonable adjustments need to be made for disabled employees.
4. Give the individual a reasonable opportunity to consider their options
This will usually involve allowing a couple of days for the individual to confirm whether they wish to proceed with an agreed exit in principle and then allowing further time in which they can consider the precise written terms (usually contained in a Settlement Agreement, in relation to which they will need to seek independent legal advice in any event).
The ACAS Code on Settlement Agreements suggests that it is good practice to allow 10 calendar days for the individual to accept any written offer. That though relates to the formal terms, and so if the formal terms are to follow, you can consider a shorter time frame for a decision in principle.
This helps to demonstrate fairness and reduces the risk of claims of undue pressure.
5. Follow up after the conversation in writing and offer a settlement agreement
Follow up the conversation in writing; being careful to strike the right tone and balance in the way the offer is framed, bearing in mind that it will be read by an independent legal adviser who will advise the employee on it.
Include a summary of the exit terms being offered, explain that the individual will be asked to enter into a Settlement Agreement (as is standard practice in such circumstances) and that the organisation will contribute towards the cost of obtaining independent legal advice on the terms and effect of the agreement. Clarify the period of time being allowed for consideration (ensuring that it is reasonable but also commercially workable from your perspective).
Key takeaways
Handled correctly, protected conversations can allow employers to navigate some sensitive employment issues with relative candour, while reducing legal risk. Preparation, clarity, respect, and adherence to legal and good practice principles are key to ensuring these discussions are effective and genuinely “protected.”
If you would like help with initial strategic planning, drafting an aide memoire, follow up letter, or settlement agreement, our experienced team of Employment lawyers would be happy to assist.
The material in this article is provided for guidance and general information only and is not intended to constitute legal or other professional advice upon which you should rely. In particular, the information should not be used as a substitute for a full and proper consultation with a suitably qualified professional. Please do contact the Bates Wells team if you require further information.