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Briefing Note

Pre-termination negotiations introduced

From 29 July 2013 a new law prevents some ‘pre-termination negotiations’ or ‘protected conversations’ from being referred to in unfair dismissal claims.

There are undoubtedly times when you as an employer want to end an employee’s employment by agreement. To do so you need to discuss your proposals with the employee. This is a risk. The employee may rely on comments you make as part of a claim against you in the future.

Before 29 July 2013, for your discussion not to be able to be referred to as part of any future claim, it needed to be ‘without prejudice’. A discussion (or written correspondence) could only be ‘without prejudice’ if there was an existing dispute, which you were trying to resolve. This was restrictive.  Whilst there was an issue with the employee there may not be a ‘dispute’. This often led to employers putting up with the problem for fear that anything they said could make matters worse or ‘creating’ a disciplinary matter which they could rely on.

The new law

From 29 July 2013 some ‘pre-termination negotiations’ or ‘protected conversations’ can take place and not be relied on by the employee as part of certain future claims even if there is no current dispute or the employee is unaware there is a problem.

This will enable you as an employer to approach an employee at any time and have a discussion about ‘moving on’.  It is hoped this will give you more of an opportunity to explore quick exits for employees, most likely supported by a settlement agreement (the new name for compromise agreement).

The without prejudice rule is not replaced.It is possible that a negotiation may be protected by both the new law and the without prejudice rule.

Limited protection

Pre-termination negotiations or protected conversations cannot be referred to in unfair dismissal cases only. An employee could still refer to the negotiations or conversations as part of a claim for discrimination, breach of contract or wrongful dismissal. The protection is therefore very limited and you should only start a pre-termination negotiation or protected conversation with caution.

Exemptions to protection

There are also a number of exceptions where the protection will not apply.

There is no protection in claims involving automatic unfair dismissal. For example, if an employee alleges they have been unfairly dismissed because of whistleblowing, union membership or because they asserted a statutory right any discussion you have had will not be protected and can be referred to in support of the employee’s claim. Of course, the discussion may still be protected if it was without prejudice.

The protection will not apply if there has been improper behavior. This is likely to include a situation where you have discriminated, harassed or bullied the employee during the discussions or afterwards. Improper behavior will also include putting undue pressure on the employee, which could be not giving the employee sufficient time to consider your offer. We expect that this is an area where case law will be rife.  Watch out for future editions of hrlegalnews.

How can we help?

We can guide you through the process of terminating an employee’s employment. We can advise you on whether a discussion with an employee is likely to be without prejudice or protected by the changes coming in. We can also help you draft a settlement agreement to protect your interests in the best possible way.

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