On 29th July this year, the Government introduced a new system aimed at allowing employers and employees to participate in confidential discussions aimed at agreeing to a parting of ways on mutually agreed terms. These discussions are referred to as “pre-termination negotiations”.
Prior to 29th July 2013, if an employer wished to have this type of conversation with a member of staff, they would attempt to speak on a without prejudice basis. The principle of without prejudice applies where there is a live dispute and is intended to enable parties to have an off the record conversation where they can speak in a frank and open manner in the confidence of knowing that the discussions cannot subsequently be referred to in litigation. By doing so, it is intended that speaking freely allows parties to make concessions which in turn is more likely to result in a compromise.
The main problem with without prejudice conversations however is that to hold a genuine without prejudice conversation there has to be a serious dispute and in the context of discussions between employer and employee, this is not always the case. Consequently, prior to 29th July 2013, employers have had to traverse a tightrope aimed at minimising the risk of an employee resigning and claiming constructive dismissal.
With pre-termination negotiations however, there is no need for a live dispute and there is consequently a greater opportunity to have a frank discussion with a member of staff regarding proposals for their departure. Unfortunately however, as is always the case, as one hurdle disappears, another appears. There are certain rules which an employer needs to follow in order to benefit from the conversation remaining confidential. Most importantly, an employer needs to avoid engaging in “improper behaviour” which is defined in the ACAS Code by reference to a non exhaustive list of examples of conduct which could amount to improper behaviour. Examples include:-
- Putting undue pressure on a party. Examples of this include not giving reasonable time to consider the offer or threatening to dismiss the employee if they refuse to accept the offer.
- All forms of harassment, bullying and intimidation.
- All forms of victimisation.
Employers should also bear in mind that the confidentiality of any pre-termination negotiations only apply to unfair dismissal proceedings. This means that if you are looking to dismiss an employee who could argue that the decision was motivated by other reasons, for instance, their membership of a Trade Union, their attempts to blow the whistle on malpractice or a protected characteristic such as sex, race or disability, they will still be able to refer to the subject matter of the meeting in subsequent proceedings.
For the above reasons, employment lawyers initially welcomed the changes on behalf of employers but advised caution when engaging in this type of discussion with an employee. Used properly however, in the right circumstances, pre-termination negotiations are a highly effective way of removing employees from your business where there are not, on the face of it, grounds to dismiss. Since 29th July 2013, within the Employment Team we have experienced a high number of clients wishing to engage in this process with great success. Along with the cap on damages for unfair dismissal and the increase in the qualifying period for unfair dismissal, the law has seen a further significant shift in the favour of employers.