When making an offer of settlement and you want to have an ‘off the record’ conversation with an employee, are you confused about what you have to do, or say, to protect yourself when having those discussions, so that a judge isn’t going to be able to take into account what’s said?
For many years there’s been a concept of having “Without Prejudice” discussions, typically between lawyers in order to make a genuine attempt to settle a dispute that has arisen. Employers have often used the expression “Without Prejudice” to cover off the record meetings with staff, but have been taking a risk in doing so, as unless there is a genuine legal dispute between parties at the time such conversation is had, “Without Prejudice” doesn’t apply. Thus, an employer can’t claim the privilege of “Without Prejudice” label in an offer of a negotiated termination if it makes the offer completely out of the blue with no earlier indication between the parties that the situation might potentially lead to some sort of litigation. There have been cases where employers have had conversations they thought they were having ‘off-the-record’, but have been made to disclose the contents of those discussions in for example, an unfair dismissal claim.
This is where s.111A of the Employment Rights Act has been useful in that it has assisted employers to facilitate discussions with employees where there might not be any litigation, and provided there hasn’t been any ‘improper behaviour’ as defined in the legislation, the employee will not be able to refer to any pre-termination discussions in a subsequent unfair dismissal claim.
The first thing to note is that an employer has to take care to make sure they fall within a s.111A regime, so protection is not lost. A significant case relating to this has been in relation to the ACAS Code of Practice on Settlement Agreements and the suggestion that the employee has 10-days to consider an offer that is made to them. The courts are prepared to find that attempts by employers to rush things is ‘improper behaviour’.
The other danger for the employer is that they attempt to use a s.111A discussion in circumstances where it would never protect them anyway, e.g. where a discrimination complaint may exist. An example of this might be to suggest compensation to somebody returning to work after maternity leave, in these circumstances this person may well be able to refer to all the things that are said to them as part of the discussion.
There will undoubtedly be overlap between circumstances when the Without Prejudice rule would apply and s.111A does.
The advantage of ‘Without Prejudice’ is that it applies to any claim e.g.:- a situation where there were a genuine dispute between the parties about the fairness of a redundancy selection and the employee has been threatening a sex discrimination and unfair dismissal complaint. If an employee has already raised a grievance on these lines, then there is a dispute, and making any offer ‘without prejudice’ is more likely to ensure it remains off the record than s.111A.
If you aren’t sure you are probably best off marking anything ‘Without Prejudice’ and referring to s.111A to be on the safe side, leaving it to the lawyers to argue about the detailed position at a later stage. There is a flowchart at page 82 of the Settlement Agreements guidance issued by ACAS that sets out the issues in this blog in pictorial detail.