Pre-Termination Negotiations

The idea of the 'protected conversation' between employer and employee has been shelved in favour of proposals for pre-termination negotiations.

The Government originally proposed the idea of the 'protected conversation' as a means by which, as the Prime Minister put it, 'a boss and an employee could feel able to sit down together and have a frank conversation at either's request'. The idea was that matters such as an employee's performance or their future plans for retirement could be addressed behind closed doors without the employer being at risk of the conversation being adduced as evidence in any subsequent litigation.

However, the proposal that has been included in the Enterprise and Regulatory Reform Bill (the ERRB), which is currently making its way through the House of Lords, is far narrower in scope than the original idea. The concept of the 'protected conversation' has been dropped and instead, the ERRB creates the concept of 'pre-termination negotiations'. This simply provides that (subject to some exceptions) an offer made or discussion held with an employee with a view to terminating employment on terms to be agreed cannot be taken into account as evidence in a subsequent unfair dismissal claim.

Extending the 'without prejudice' rule?

Most employers are familiar with the 'without prejudice' rule, which is often used by employers to start discussions proposing the termination of employment of an employee on the basis that the discussion will be inadmissible as evidence. However, for the 'without prejudice' rule to apply there must be a genuine attempt to resolve an existing dispute between the parties. This requirement for the 'without prejudice' conversation to resolve an existing dispute has created uncertainty for employers about whether such conversations may result in an employee challenging their validity.

The new pre-termination negotiations will seemingly extend the 'without prejudice' rule since they can take place where there is no actual dispute with the employee. This may bring some welcome certainty for employers.

The limits of the protection

The provision in the ERRB, as it stands, will only prevent what is stated in the settlement offer, or during discussions about it, from being admissible in ordinary unfair dismissal proceedings. This means that the fact and content of such offer or discussions would be fully disclosable in any other case, including:

automatically unfair dismissal (for example, for asserting a...