For those of us who have been involved in advising on employment law for more than a decade, there have been many changes with which to contend. We have had the ill-fated Dispute Resolution Regulations, which were introduced in 2004 and repealed a mere handful of years later, changes to the qualifying period for unfair dismissal claims from two years to one year and back to two years again, full scale change to equality legislation in the introduction of the Equality Act 2010 and, more recently still, the introduction of tribunal fees and new rules of procedure. However, in terms of day to day employment law in practice, the impact of the introduction of “protected conversations” to the employment law terrain is hard to beat.
“Protected conversations” or, more correctly, “pre-termination negotiations” were championed by Vince Cable, the then Secretary of State for Business, Innovation and Skills, and introduced into the law as Section 111A of the Employment Rights Act on 29 July 2013. From that date, it became possible for employers to hold confidential, “without prejudice” conversations with employees with whom they did not have existing disputes, with a view to agreeing a mutual termination of their employment. As with any new law, it was difficult even for employment law commentators to know just how much - or little - impact this introduction would have, in particular, how much of an uptake there would be by employers.
In fact, protected conversations are now a very definite part of the employment law landscape. While not all employers are aware of the possibility of commencing pre-termination negotiations with individuals within their work force, it is now a mainstay in any discussion I, or my fellow employment law practitioners, have with an employer regarding a tricky employee, particularly where they are finding it difficult to articulate exactly what the problem is. While this “without prejudice” conversation has its limits, most notably that it only protects employers against reliance on the details of the conversation as evidence in an unfair dismissal claim and does not extend to other forms of tribunal claim, notably unlawful discrimination, these types of discussion can – and often do – save both employers and employees (in some cases) several months either in terms of going through the necessary steps of a performance improvement plan or the necessary levels of warning involved in disciplinary proceedings culminating in dismissal on the grounds of (mis)conduct. The reality is often that the employee is simply not a good fit for the organisation.
While “protected conversations” can be criticised as providing the employer with a “get out of jail free” card, they can also benefit the employee in both the long and short run. Generally speaking, the pre-termination negotiations involve the employer making a financial offer to the employee as compensation for loss of their job and this can constitute weeks or even months’ worth of wages or salary. In addition, it is usually possible to agree satisfactory terms of a reference for the employee as they seek employment elsewhere and both the employer and employee benefit from the confidentiality requirements inherent in any negotiated termination. Finally, it is usually possible to agree payment in lieu of notice or, alternatively, a period of garden leave, at the end of which the employment will terminate, both of which can be beneficial to the employee in terms of getting paid while not having to continue to attend work to the end of their contractual or statutory notice period.
While, when protected conversations were introduced nearly three years ago commentators were unable to predict the extent of their usefulness, it is clear that, with the appropriate professional advice (which, of course, I would strongly recommend), employers are slowly getting a more sure-footed in relation to this particular change in employment law.
For any employer or indeed employee involved in (or considering) pre-termination negotiations, the ACAS Code of Practice 4 (July 2014) – “Settlement Agreements” is a must and can be found at www.acas.org.uk/media/pdf/j/8/Acas-Code-of-Practice-on-Settlement-Agreements.pdf
Dawn Robertson works out of Harper Macleod’s Edinburgh office and advises both employers and employees.