Confidential… Until it isn’t. Protected Conversations in employment law

Protected Conversations are a useful tool when you’re looking to part ways with an employee on agreed terms, but they should not be seen as a get-out-of-jail-free card. Handled well, they can avoid costly disputes, but they can also be an evidential goldmine for employment lawyers if handled badly. Managers (and even experienced HR professionals) often fail to distinguish between the protections afforded by a Protected Conversation and by Without Prejudice privilege. Whilst both often apply, each has its own limits and legal tests.

What’s the difference?

It’s common to see exit communications marked both “Without Prejudice” and “Subject to section 111A Employment Rights Act 1996”.

Protected Conversations. These fall under section 111A of the Employment Rights Act 1996, a statutory rule which allows employers (and employees) to speak off-record about ending the employment. Such discussions are immune from disclosure in ordinary unfair dismissal proceedings only. This protection can however be lost if the employer acts improperly.

Without Prejudice privilege. This is a common law principle which protects genuine settlement discussions in the context of an existing dispute (where the elements of a future legal claim are present, if not resolved). It is not so limited in scope and offers protection for all types of employment litigation – including discrimination, whistleblowing, automatic unfair dismissal, breach of contract, etc. This protection is not as vulnerable to being set aside because of the employer’s conduct.

Common pitfalls where Protected Conversations lose their immunity

The confidentiality afforded by s.111A can be lost if the employer engages in “improper behaviour”. This doesn’t just apply to obvious bullying but it can include more subtle missteps, often due an effort to “persuade” the employee of the benefits of settlement.

Examples include:

• Implying dismissal is inevitable before a fair process has started or run its course.
• Misleading statements like exaggerating the misconduct or suggesting the employee’s defence would be hopeless.
• Overstating the chances of dismissal without offering enough context (e.g. restructure plans or disciplinary allegations).
• Discriminatory remarks or harassment during the protected discussion.
• Sending the employee home while they “think it over,” when the primary motivation is to exit them fast and manage the fallout afterwards.
• Giving an unreasonable deadline to take advice and accept the terms (i.e. less than 10 days from receipt of the settlement agreement).
• Attempting to influence their choice of legal adviser.
• Taking advantage of an employee’s vulnerability (like impaired mental health) without appropriate safeguards.

Cases are fact-specific. Sometimes, a single instance can be serious enough. More often, a combination of factors will contribute to the protection being lost.

Conversely, Without Prejudice privilege is not so vulnerable to being set aside. This only happens in exceptional circumstances, like perjury, blackmail or other unambiguous impropriety. Employers therefore tend to be a bit more bullish when they know they are covered by Without Prejudice privilege.

The danger zone – mind the gap!

Employers tend to trip up when a legal dispute hasn’t yet arisen (so that Without Prejudice doesn’t apply), but they nevertheless conduct themselves heavy-handedly in negotiations so that s.111A protection is lost. This gap, where neither protection applies, is where things often unravel. It is therefore worth keeping the following distinctions in mind:

Documentation and process are still what matter

A Protected Conversation should never be a shortcut. Employers should still follow fair procedures or at be least primed to do so quickly in the event negotiations fail. They should document the rationale for any offer and ensure the employee has an unrestricted opportunity to take advice. It goes without saying, a well-drafted settlement agreement is essential to close the loop.

If you’re planning a Protected Conversation and want to ensure it is handled properly, feel free to get in touch for clear and practical advice.

This article is not legal advice, which it may be sensible to obtain before you take any decisions or actions in the areas covered. Please do contact me if you would like an initial discussion of your situation.

Fabio Grech

• Employment