"Without prejudice discussion" and "protected conversation" are two phrases often used interchangeably to refer to an off-the-record discussion with employees.
Whilst this is understandable due to the similarities of these two types of discussion, employers risk using the wrong term and leaving themselves exposed to such discussions, not being afforded the intended protection without an appreciation of the slight differences and conditions.
Therefore, employers need to be more than just familiar with the general concept of these phrases (both of which provide a route to discuss the potential exit of an employee on more relaxed terms), and ensure they know the limitations of protection offered.
When do without prejudice or protected conversations come into play?
Sometimes employment relationships do not work out. There are procedures in place to address many concerns, and employers should have clear policies outlining the process for employees; for instance, a capability or disciplinary policy. However, employers sometimes wish to resolve matters more swiftly or amicably and without the need for a formal HR process.
In such situations, employers can propose an off-the-record discussion with the employee, during which the employer (and the employee) can discuss the employment relationship and propose bringing an amicable end to this on specific terms. There is usually a negotiation period between employer and employee regarding the terms, with the hope these can be agreed "off-record".
If a settlement is reached, the terms agreed should be summarised in a legally binding document, known as a settlement agreement, which both parties sign to accept the terms. A settlement agreement waives an employee's right to bring a claim against their employer in an employment tribunal, so an employee must take legal advice regarding the terms of such an agreement to make it binding.
The discussions mentioned above are usually conducted under the title of a “without prejudice discussion" or "protected conversation", so they are afforded protection from the discussions being referred to in any potential future employment tribunal claim. However, which is the correct term to use?
Without prejudice discussions
Without prejudice is a long-standing concept derived from case law and a common law principle.
For a without prejudice discussion to allow the protection of being an off-the-record conversation, there must be an existing dispute between the employer and the employee at the time of discussion. If not, employers run the risk of the without prejudice protection not applying; this would allow the employee the option to refer to any comment made in any future litigation at an employment tribunal.
There are no clear rules regarding the term "dispute" for employers. Before engaging in any discussion, employers need to consider the specific situation to determine if there is a current dispute or could be a dispute between the employer and the employee. For example, if the employer and employee disagree on the employee's conduct, this could be a potential dispute.
There are also other criteria which should be met for the without prejudice protection to apply, including:
- The employer and employee must approach without prejudice discussions with a genuine attempt to settle the existing dispute between them;
- Both the employer and employee have contemplated, or might reasonably have considered, taking matters to a litigious stage if they cannot agree on issues through negotiations via this route;
- Both the employer and employee must consent to engage in without prejudice discussions; and
- To give informed consent, both the employer and employee must be familiar with what without prejudice means and the implications of this.
If the above factors can be established, then without prejudice discussions can take place with the comfort they should be protected under this rule.
However, it is essential to remember that whilst a discussion may offer without prejudice protection; this does not mean that protection cannot be taken away; the protection is not infallible.
If the employer or employee engaging in discussions do not conduct themselves properly, the protection can be lost because it would be unfair to allow such matters to remain confidential. For example, if either side imposes undue influence on the other, coerces or even blackmails. Such conduct is commonly dubbed "unambiguous impropriety" or "improper behaviour".
Protected conversations are a more recent addition introduced under S111A of the Employment Rights Act 1996.
In essence, these mirror a without prejudice discussion in purpose. Therefore, many question why protected conversations were necessary when the common law principle of without prejudice already existed.
Protected conversations were introduced to enable employers (and employees) to engage in an off-the-record discussion when there is no ongoing dispute. It is, therefore, the case that protected conversations can often be suggested unexpectedly. However, they have the same goal in looking to agree on an amicable end to the employment relationship undercover of a settlement agreement.
Whilst protected conversations provide the impression of offering protection that stretches further than that given by the without prejudice rule, this is not the case because of the absence of establishing if there is a dispute.
The protection given via protected conversations is limited because it is restricted to claims for unfair dismissal under the Employment Rights Act 1996. Therefore, if an employee brings another type of claim, such as a claim for discrimination, the comments made during the protected conversation would not be protected.
Therefore, employers must be cautious about the contents of the protected conversations and ensure their comments do not enable an employee to bring claims against them and use conversations as evidence in an employment tribunal.
Protected conversations are often used when an employer wishes to avoid embarking on a long, drawn-out process. For example, before starting a redundancy process, an employer may use a protected conversation to offer an employee an enhanced exit package.
Alternatively, an employer may enter into a protected conversation where an employee's performance is not at the required level for the business. Rather than taking the employee through a performance management process over several months, they look to agree on an amicable parting of ways.
If you find yourself entering into an off-the-record conversation with an employee, we advise that you seek legal advice from an employment lawyer so you can be sure you start discussions under the correct title and provide as much protection as possible for your business.
We will also be happy to guide you through the conversation, which can often be tricky, and assist with any necessary documentation, such as the all-important settlement agreement, which incorporates the terms of any agreement reached between the parties.