Protecting conversations between employer and employee

The difference between without prejudice privilege and the protection afforded by section 111A of the Employment Rights Act 1996 is significant, explains Sean Jones QC

In the perfect universe imagined by employment lawyers, line managers concerned about an employee's performance are open and honest about it. Performance improvement plans are devised, support provided, and, when efforts fail, all part company knowing that everyone gave avoiding a dismissal their very best shot. Meanwhile, in the
real world, things are messier.

Line managers frequently avoid confronting an issue
until well past the point that
the relationship can be saved.
At that point most managers (and their long-suffering HR support) fervently hope that a way can be found for the employee to 'go quietly'. They want to sit the employee down and say: 'Look, your time is up. We can now plod through the sort of procedure necessary to persuade a tribunal that we've acted fairly or we can all be spared the pain and you can take this cheque.'

The risk is that the employee will respond: 'So, you're telling
me any procedure will be a sham. I'm off to bring unfair dismissal proceedings which you are now bound to lose.'

Lawyers will naturally start wondering whether such conversations are protected by without prejudice (WP) privilege. That privilege may indeed apply on ordinary principles. However, those principles require the existence of a 'dispute' and it is
not always clear that one exists.
In 2013, the Employment Rights Act 1996 was amended to add section 111A. The legislation could simply have extended
the reach of WP privilege by removing the requirement for
a dispute. Instead, it created a parallel protection: the so-called 'protected conversation'.

In Faithron Farrell Timms LLP v Bailey UKEAT/0025/16 the Employment Appeal Tribunal (EAT) had to consider the extent of the difference between WP privilege and the protection afforded by section 111A. The differences, it turns out, are significant.

The claimant was an office secretary. She worked part time. Her employer decided that part-time working was no longer possible. The claimant initiated discussions about an agreed severance. The way in which
the discussions subsequently developed resulted in a grievance. Both the grievance and the consequent report
made extensive reference to
the discussions. The claimant subsequently commenced tribunal proceedings.

Both parties' pleadings made reference to the discussions.
Both unfair dismissal and sex discrimination allegations were raised. There then arose a dispute about what materials relating to the discussions were admissible. The tribunal considered arguments based on both WP privilege and section 111A.
The novel points arise from the latter arguments.

The starting point is Her Honour Judge Eady QC's view that 'section 111A has to be viewed independently of common law without prejudice principles: its construction is
to be informed by the language parliament chose to use, not the language of the case law that underpins without prejudice privilege'.

The section provides that: 'Evidence of pre-termination negotiations is inadmissible in any proceedings on a complaint [of unfair dismissal].' Evidence
is admissible, therefore, in discrimination cases and in cases of so-called 'automatic' unfair dismissal (section 111A(3)).

But what happens in a case where there are alternative
claims for unfair dismissal
and discrimination? The EAT confirms that the material may
be admissible for one claim but not the other. That will require
a certain amount of mental gymnastics from tribunals.

Had the confidentiality of
the discussions been waived?
On this question, the EAT went further than either of the parties' submissions and concluded that the prohibition on admissibility could not be put aside by the agreement, explicit or implicit,
of the parties. In effect, and in contrast to the position with WP privilege, the confidentiality cannot be waived.

What was the scope of the inadmissibility? The claimant argued that it was limited to details of any offer made. On its face the provision deals with 'evidence of pre-termination negotiations', which are defined (at section 111A(2)) to mean
'any offer made or discussions held, before the termination in question, with a view to it being terminated on terms agreed between the employer and
the employee'.

The EAT concluded that the scope is wide enough to include material that does not itself
form part of the negotiation.
So, internal company discussion about the negotiation process, including reports to more senior managers or the board, would be included. The scope 'must extend to the fact of the discussions, not simply to their content'.

Section 111A offers greater scope for employers to explore the possibility of an employee going quietly without increasing the risk of a successful unfair dismissal claim. It's important
to recall, however, that there
are limits. The only discussions protected are those that take place 'with a view to' the employment being terminated on agreed terms.

Further, section 111A(4) provides that where in the tribunal's opinion anything
said or done was 'improper' or was 'connected with improper behaviour', the extent of inadmissibility becomes a matter for the tribunal to decide by considering what would be just.

Sean Jones QC is a barrister practising from 11KBW @seanjonesqc www.11kbw.com