Protected conversations to terminate employment– how can employers use them?

Pre-termination negotiations are a useful tool to help an employer and an employee have an ‘off-the-record’ discussion to explore the possibility of ending the employment relationship on mutually agreeable terms.

These conversations are protected from being referred to in any subsequent ordinary unfair dismissal litigation by way of section 111A of the Employment Rights Act 1996, unless there has been improper behaviour.

The Employment Appeals Tribunal (EAT) recently provided some clarity on the scope and application of the above statute in Gallagher v McKinnon’s Auto and Tyres Ltd. In this case, the EAT upheld the Employment Tribunal’s (ET) original decision that evidence of conversations held with a view to ending the employee’s employment on agreed terms was inadmissible.

The employee, a branch manager, had been on sick leave for two months. The employer was able to cover his role during this time, leading them to realise that the role was not required.

In a meeting that was originally intended to facilitate his return to work following a period of sickness absence, the employee was offered an exit package. The employee was given 48 hours to consider the offer, at which point if it had not been accepted, a redundancy process would begin.

The employee argued the way the offer was presented combined with the 48-hour time limit subjected them to undue pressure. Hence, the discussions amounted to impropriety and were, therefore, admissible as evidence in his unfair dismissal claim. It was held that the ET had not erred in rejecting the above argument, finding that the employer had not behaved improperly. Thus, the conversations were protected and inadmissible.

The EAT distinguished between redundancy and disciplinary situations. In a disciplinary situation, the ACAS Code of Practice on Settlement Agreements states that one example of undue pressure could be telling an employee that if a settlement proposal is rejected, they will be dismissed.

Whilst this is a good result for employers, it is important to remember that it all depends on the circumstances of the case. What is held to be reasonable for one employer’s situation, it may not be for another.

If you would like advice on how to conduct a pre-termination discussion, please contact a member of our team.