Without prejudice and protected conversation - when might an employer want to use it?

A without prejudice conversation is based on a common law principle that allows parties in a dispute to have a conversation to try and reach a settlement to resolve a dispute. That conversation isn’t then later admissible as part of a hearing or a tribunal case.

They are used in all sorts of situations by employers. It might be used in situations where there’s a grievance causing a breakdown in relationship with the employee. There might be performance issues, a redundancy situation, long-term sick leave, or even for misconduct where the employer is not sure whether there’s enough to justify a summary dismissal.
What conditions need to be met to have a without prejudice conversation? Is there anything specific that employers need to be aware of?

Case law suggests that a grievance doesn’t necessarily mean that the parties are in an active dispute. The question is whether there is actually a dispute. If there is, then the without prejudice rule may apply. Whereas, if the concern was about a pay issue from the employee for example, the employer may say that’s not a dispute as such, and therefore the without prejudice rule at common law will not necessarily apply.

When might an employer want to have a protected conversation and how is that different to a without prejudice conversation?

Protected conversations have been around since 2013, when the then Conversative government under David Cameron introduced a statutory framework for protected conversations.
It was introduced to cover various scenarios where there’s not actually an active dispute between the employer and employee, but there might be one in the future. This allows parties to have a framework within which they can have a ‘protected conversation’ to explore the option of agreeing an exit under a settlement agreement. The legal framework is under the Employment Rights Act 1996 and backed up by a code of practice.

Does an employee have to agree to having a protected conversation?

An employer should not force an employee to have a protected conversation, although some employers will see it as the preferred route, to then allow them to put forward a proposed settlement agreement and remove the employee. Ideally you should get the employee’s consent to having such a conversation.

What happens if an employer forces an employee to have protected conversation?

If the employer shows what is deemed “improper behaviour” by putting too much pressure on the employee, then this can be evidence that the content of those conversations was not protected and therefore could be admissible in evidence in any later tribunal proceedings. Employers therefore need to tread carefully.

Can an employee challenge the status of a conversation that the employer considers is a protected conversation?

If the parties decide to litigate, it could be important and persuasive evidence the employee relies on in a tribunal claim. For instance, if an employee brings a claim for unfair dismissal and discrimination, they might want to rely on what’s been said in a protected conversation as part of the evidence to show the employer’s discriminatory conduct.

What steps can an employer take to reduce the risk of a protected conversation being challenged?

Employers should generally follow the ACAS code of practice on settlement agreements. Key steps include allowing the employee to be accompanied during the meeting and allowing a reasonable amount of time for the employee to consider an offer and seek independent legal advice, usually ten days. In practice, the parties often get exit terms agreed inside ten days.

What are the pitfalls of not following the code for employers?

One of the issues for employers is that the process can become protracted. Employees sometimes will want to “go slow” to delay their exit and extend their termination date, whilst still getting paid. Employers will want to ensure that if negotiations aren’t going to be agreed within a certain period of time, then they have a plan B to start whatever formal process may be appropriate, such as a PIP or redundancy selection process.

The other downside is if there are issues around discrimination or whistleblowing, then it is possible that in which case the protected conversation protection under s111a won’t apply in this situation. A typical example would an employee who has been on long sick leave and has disability protection. Whilst the employer may want to try and have a protected conversation, as discrimination is a factor they can’t simply rely on the protections offered under s111a.

For more information about any of the issues covered in this update, or if you are an employer or employee needing further advice, please get in touch with one of our Employment Law solicitors today.