How to have an 'off the record' conversation with an employee
Author: Nick Vernon
Applies to: England, Wales and Scotland
Employers may prefer to negotiate the termination of an employee's employment rather than carry out a potentially long or acrimonious dismissal process.
In this article, we consider some of the key issues to be aware of before holding an 'off the record' conversation with an employee.
Employers will be aware that a mechanism for 'pre-termination negotiations' was introduced in 2013 (by way of section 111A of the Employment Rights Act 1996) to allow employers to hold 'off the record' conversations with employees that cannot be referred to in any later unfair dismissal proceedings (often known as 's.111A conversations'). See our previous article. Section 111 conversations can be initiated by either the employer or the employee.
When might an employer want to have a 's.111A conversation'?
This is usually in situations where the employer:
- is considering possibly terminating the employment relationship (e.g. where there are poor performance issues, disciplinary concerns or where the employment relationship is simply not working out); and
- might want to avoid a lengthy and/or difficult dismissal process or is concerned that there is not a sufficient reason for a 'fair' dismissal.
In these circumstances, a s.111A conversation allows the employer to try to achieve an agreed termination by offering a severance package to the employee on an 'off the record' basis.
What protection does an employer have in a s.111A conversation?
The conversation will not be admissible in any future 'ordinary' unfair dismissal proceedings provided:
- it relates to the ending of the employment relationship;
- a settlement offer is made or there are negotiations about the employment being terminated; and
- it does not involve 'improper behaviour' (see below).
This means that the employee (and the employer) would not be able to refer to the conversation if either, the employee rejected the settlement offer or, the employer withdrew it and the employee later makes an 'ordinary' unfair dismissal claim (which they might want to do to try to show that any future dismissal was pre-determined).
What is 'improper behaviour'?
There is no legal definition of 'improper behaviour', but it would include:
- any form of bullying or intimidation towards the employee;
- putting undue pressure on the employee to accept the severance offer, e.g. by setting an unreasonably short timescale; or
- informing the employee that they will be dismissed if they do not accept the severance offer.
Where there has been any 'improper behaviour' by an employer in a s.111A conversation, the s.111A protection will be lost. However it is possible, and recommended, for an employer to inform the employee, in a neutral manner, of the alternatives that may occur if an agreement cannot be achieved (for example, the possibility of future disciplinary action which could ultimately result in dismissal) to allow them to make an informed choice as to the options available to them.
Are there any limits to the s.111A protection?
Yes, most definitely.
The protection does not extend to legal claims other than 'ordinary' unfair dismissal. This means that an employee is not prevented from referring to the contents of a s.111A conversation in any other type of legal proceedings, such as claims for discrimination, whistleblowing, or any automatically unfair dismissal (such as where the dismissal is related to pregnancy/maternity or health & safety or trade union membership).
As a result, s.111A conversations are likely to be best used in the more straightforward cases where a 'normal' unfair dismissal claim is expected to be the employee's only recourse should the conversation not turn out as intended and it becomes necessary to dismiss.
If an employer wants to have an off the record conversation but is concerned about other types of possible claims (such as discrimination), it will have to rely on 'without prejudice' protection - which only applies where the parties are already 'in dispute'.
Tips on how to hold a s.111A conversation
- Hold a meeting with the employee to advise them of the relevant disciplinary or performance concerns and that a formal process with shortly begin in relation to the concerns
- Alternatively (and often preferably), a formal procedure could first be invoked by holding a disciplinary or performance review meeting, at the end of which a s.111A conversation could be initiated (by the following steps)
- Ask the employee if they are willing to have an off the record conversation. The employee should be made aware that the conversation is confidential and that it would not have any bearing on any future disciplinary/performance management process if the discussions are not successful. The employee should also be informed that the discussions are expected to be inadmissible in Tribunal proceedings
- If the employee is willing to have the conversation, inform them that an alternative to commencing or continuing the disciplinary/performance management procedure could be to agree the mutual termination of their employment under a settlement agreement. The employer should not imply that the employee will definitely be dismissed if the formal procedure is continued (see 'improper behaviour' above)
- If the employee is willing to continue the discussion, the employer can explain the key terms of the settlement. After the meeting, the employer can send the proposed settlement agreement to the employee
- The employee should be given a reasonable period of time to consider the terms and take independent legal advice on the terms of the agreement. The ACAS Code of Practice suggests providing the employee with a minimum of 10 calendar days to consider the terms of any offer
- All written correspondence with the employee, including the notes of the off the record conversation, on the subject should be clearly marked 'covered by section 111A ERA 1996'.
- If the employee is not willing to explore the possibility of settlement, the employer should stop the conversation immediately. It will then need to decide whether to progress the disciplinary or performance issues formally
- It hopefully goes without saying that the person having the section 111A conversation on behalf of the employer should choose their words carefully and not say or do anything in the course of the discussions which could be discriminatory as this could result in protection being lost.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.