Oct 2013
As one of its many recent changes, the Government has now introduced a new right for employers, employees and their representatives to have confidential discussions regarding the termination of an individual’s employment.
Historically, there was never any such thing as an “off the record” discussion with an employee. The only protection employers could rely upon is the existing “without prejudice” rule. However, for that rule to be effective, there must be a “dispute” that the parties are trying to settle. Previously, therefore, if there was no dispute and an employer simply wanted to negotiate the exit of an employee, it did so with great risk, knowing that the employee could, later, rely on that discussion when pursuing a claim before the Tribunal.
The Government is now offering employers greater protection so that any discussions by employers to negotiate a settlement can be confidential; provided certain provisions are met. The settlement discussions apply in addition to the "without prejudice" rule, which remains unaffected by these changes.
Unfair Dismissal
The main point for employers to note is that protection is only against claims for ordinary unfair dismissal. If the potential claims involve anything other than this then the confidentiality provisions will not apply and the employee can rely on any such settlement proposals, to use against the employer. Therefore, if there is any form of discrimination, breach of contract, wrongful dismissal or any of the exceptions to ordinary unfair dismissal, such as, whistle blowing, union membership, asserting our statutory right etc. these will not be covered.
Employers must therefore be clear that the protection applies before having any such discussions that attempt to dismiss an individual. It is therefore most likely to apply with issues of redundancy, poor performance and disciplinary.
The Process
The recommendation is that the discussions can be raised by either the employer or employee (although the main focus is on giving protection to the employer). Employers should give employees a minimum of ten calendar working days to consider any proposals and if there is to be a meeting, employers should allow the employees to be accompanied. This raises a difficult practical issue in how you go about convening a meeting, to give the employee the right to be accompanied.
Simply because an employer raises this issue, does not mean any subsequent dismissal will be fair and the usual fair procedures will need to be followed.
Improper Behaviour
If there is any improper behaviour then the protection will not apply and the employee will be able to rely on the settlement negotiations. Helpfully, the Legislation does not set out details of what amounts to improper behaviour, but it is likely to include things like; any form of harassment or discrimination, any pressure applied on the individual (e.g. threatening them that if they do not accept the offer that their employment will terminate), not giving reasonable time for the employee to consider the offer etc.
Settlement Agreement
Ultimately the aim is to achieve a settlement agreement so that the employer has protection against any claims. If the employee agrees then a settlement agreement is likely to be needed and that will give the employer protection against any employment claims, including unfair dismissal. “Settlement agreements” is purely the new name for compromise agreements.
This change is welcome news to employers and may allow, in certain circumstances, employers to achieve a quick exit with an employee. However, its application is limited (to just unfair dismissal) and, as a new rule, we have no guidance as to the types of behaviour that will be tolerated. There are some interesting practical issues that the new rules create, for example, what does the employer do if the employee does not accept and how does the employer introduce the discussions and allow the employee to be accompanied?
If you would like any further advice regarding confidential settlement discussions or settlement agreements, please contact Matthew Kilgannon on 01483 411517 or [email protected]
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