Off The Record Conversations

So what is the difference between protected and without prejudice conversations?

Increasingly settlement agreements are being used where an employer considers letting go an employee (and this can include “workers”). This is particularly so in redundancy or performance/misconduct situations.

But how can an employer safely broach the conversation in the first place? This is where the off-record conversation comes in as it allows the employer to check if the employee might be interested in this option.

Often, employers refer to the off-record conversation  as a “protected conversation” or “without prejudice” (or even both) during an initial exploratory meeting, and this/these terms are then repeated in a follow up email or letter.

But what actually is the purpose is for referring to these terms, is there any difference between the two and, if so, what?

Why have an off-record conversation?

In short, it’s intended to ensure the matters discussed are confidential and cannot be referred to in Tribunal/Court proceedings.

To illustrate, let’s say:

• an employer offers a severance (also known as an ex-gratia) payment during a conversation that is not off-record (we typically call these ‘open’ conversations) but the employee is uninterested from the outset or the conversation stalls without a settlement agreement being entered into,
• the employee is eventually dismissed anyway.

In this situation, the employee could run the argument that the severance payment offered in the open conversation was evidence of a predetermined outcome – i.e. it was always the employer’s intention to dismiss prior to following a process. In which case, the employee may have a fairly easy (and costly) unfair dismissal claim that they could bring.

If, in the above example, the offer was instead made during an off-record conversation, that severance offer, or the very fact of the meeting in which it was broached, could not be referred to in support of an ordinary unfair dismissal claim at the very least. It also prevents employees from disclosing the fact of the offer to others, including their colleagues.

Difference between “protected” and “without prejudice” conversations

Let’s start with a protected conversation – sometimes known as a pre-termination negotiation.

Protected conversations held under Section 111A of the Employment Rights Act 1996 allow employers and employees to have an off-record conversation about bringing the employment relationship to an end in return for an exit package. The terms of that package are outlined.

Protected conversations, unlike without prejudice conversations, can be held even if there is no existing dispute between the employer and the employee. This makes it ideal for redundancy situations or at the outset of any HR process such as performance. Put simply, these conversations are ideal where an employer wishes to offer a settlement agreement to an unproblematic employee with a clean record simply due to financial reasons.

A major disadvantage is that protected conversations can be referred to in a tribunal if the package was instead being offered in an attempt to settle any alleged claim other than a claim of ordinary unfair – for example alleged discrimination or harassment claims. This is when

“without prejudice” conversations should instead be favoured. They have the same effect as a protected conversation (in that the matters discussed would not be disclosable) but they have a wider scope. This is, therefore, a significant advantage over protected conversations.

However, they can only be used if there is a genuine, existing dispute. A grievance may be enough to demonstrate there is a dispute. But employers must be careful as should an employer ostensibly hold a “without prejudice” where there is no genuine dispute, a court or tribunal can disapply the protection and the employee can refer to it in support of their claim.

There are other times when either “protected” or “without prejudice” conversations can be referred to in a court or tribunal. For instance, in the case of protected conversations, protection can be lost if there has been ‘improper behaviour’ such as placing undue pressure on an employee to accept a settlement – this can include the use of unreasonably short timescales to consider the offer.

Anything else to be aware of?

Yes, always bear in mind that the conversation may not result in a settlement agreement being entered into. This could be for a number of reasons although in the majority of situations it’s because the employee and employer are poles apart when it comes to the numbers. For this reason, employers are well advised to always have a Plan B. Often, Plan B is run alongside the protected or without prejudice conversation so that the employer remains best placed to deal with any surprises/negotiations or mind changes that may happen whilst the off-record conversation is on-going.

Are off-record conversations worthwhile then?

Absolutely. Especially where an employer might want to avoid following a full redundancy/restructuring, disciplinary, performance and/or ill-health, dismissal or redundancy process. This could be for a variety of reasons including insufficient time/resources and, of course, guaranteeing against internal appeals and/or costly litigation.

Employers simply need to be careful in their approach ahead of that initial off-record conversation and, not least, identify the correct conversation type. Our Employment team is here to help and advise the best approach in any given scenario the employer is facing.