Protected Conversations and Settlement Agreements – What the Law Says

Settlement Agreements and Pre-Contract Negotiations

In 2013, the law changed to allow you to have “off the record” conversations with your employer. These are known as protected conversations.

This article explains what you need to know about the law on protected conversations. For some practical advice on how to make the most of a protected conversation, click here.

1. Why did the law change?

It was thought that many employers were afraid to manage their staff properly through fear of being taken to an Employment Tribunal.

Occasionally, an employer would try to have a frank conversation with a member of staff only to find that it backfired – the employee took offence, resigned and claimed constructive dismissal.

The Government is changing the law so that “the boss and an employee feel able to sit down together and have a frank conversation – at either’s request” (David Cameron’s speech on 10 November 2011).

2. Why can’t employers just use the ‘without prejudice’ rule?

The ‘without prejudice’ rule prevents statements from being used in evidence if they were made in a genuine attempt to reach a settlement.

However, this only applies where there is an existing dispute.  Often employers or employees want to have a frank discussion in circumstances where there is no existing dispute.

3. What difference does the change in the law make?

Evidence of any offer or discussion of a proposed deal will not be admissible in ordinary unfair dismissal proceedings unless there has been improper behaviour.

It effectively extends the without prejudice rule to situations where there is no existing dispute.

The new law only applies to ordinary unfair dismissal claims and would not apply to discrimination or breach of contract claims.  There is a risk that some employees may allege discrimination in order to get round the rules.

4. Are there any formalities to having an ‘off the record’ conversation?

There are no formalities as such, provided that the discussion is with a view to reaching a settlement agreement.

There is no need for your employer to make the offer in writing, although they usually do.  The recommended minimum period for you to consider an offer is 10 days.

5. Are there any exceptions?

In some circumstances, evidence of the discussions will be allowed.

The new law states that anything said or done which is connected with improper behaviour can still be used in evidence.

Examples of improper behaviour include:

  • Harassment and intimidation through the use of offensive words or aggressive behaviour;
  • Physical assault and other criminal activities;
  • Discrimination of the grounds of one of the 9 protected characteristics.

Further details are included in the ACAS Code of Practice on Settlement Agreements.

Contact Us For Advice

If you have been invited to a protected conversation or if you have received an offer of a settlement agreement, you will need to make sure you receive legal advice.

We advise clients throughout the UK. We provide clear and prompt advice on a confidential basis.

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