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Off the record, without prejudice and pre-termination negotiations
These terms are often heard when employers seek to bring an individual’s employment to an end. But what do they mean and what practical tips are there for employers?
Off the record
- A conversation that is unofficial, and not to be disclosed or reported.
- However, the phrase confers no legal protection.
- An employer having an off the record conversation runs the risk that what is said, perhaps an admission is made, could be used by an employee as evidence supporting a claim.
- There is one caveat: protection may be available if the off the record conversation qualifies as a pre-termination negotiation (for which see below).
- The without prejudice principle is designed to encourage the settlement of disputes out of court.
- It prevents any written or oral statement made in a genuine attempt to settle an existing dispute from being used in legal proceedings against the party making the statement.
- Importantly, for without prejudice to work there must be an existing dispute, ie a claim that has been brought or one that is in reasonable contemplation. In many employment situations employers want to speak on a without prejudice basis when there is no existing dispute.
- Whether there is or is not an existing dispute is fact-specific. There is no precise definition. A grievance is not necessarily a dispute, as it might be upheld or dismissed on grounds that the employee finds acceptable. The commencement of disciplinary proceedings does not always give rise to a dispute, as there may be no sanction imposed at the end of the process. Dismissal clearly gives rise to a dispute. A dispute can exist, but then disappear if circumstances change.
- If there is no dispute, employers will usually engage in a carefully-scripted conversation with the employee in the hope that the employee might be interested in exploring on a without prejudice basis another option, for example, the forthcoming performance management process.
- Even if without prejudice protection is available, it does not mean that the discussions can never come before a court. There are exceptions, including where disclosure is necessary to explain a delay, to help interpret a settlement agreement, in the case of misrepresentation, fraud, perjury, blackmail or “other unambiguous impropriety”.
- The problems with the without prejudice principle gave rise to new legislation under section 111A, Employment Rights Act 1996. This protection applies to any offer made or discussions held before termination with a view to the employment being terminated on agreed terms. The fact and content of a pre-termination negotiation (PTN) is not admissible in or disclosable to an employment tribunal.
- Importantly there is no need for there to be an existing dispute. The process can be commenced by employer (or indeed employee) and typically it would begin just before or immediately after an open performance management or other internal process has started.
- No specific form of words is required (hence the possibility that an off the record conversation could qualify as a PTN), although it is advisable to mention section 111A in follow up communications.
- PTNs have limitations. They can only be used in the case of misconduct, capability or redundancy dismissals and not if the dismissal would be automatically unfair (eg discrimination or whistleblowing). Employers must therefore evaluate the risk of such claims arising before embarking on a PTN.
- Protection can also be lost if there is improper behaviour. The ACAS Code of Practice on Settlement Agreements includes examples such as harassment, bullying or intimidation, victimisation, threats by the employee to damage the employer’s business and undue pressure.
- Undue pressure could be imposing an unreasonable deadline - the ACAS Code suggests the employer must allow at least 10 days for the employee to consider an initial written offer (but this probably doesn’t extend to any revised offer unless the revision is a fundamental change to the deal) - or threatening dismissal.
- According to the ACAS Code, employees should be offered the right to be accompanied to a PTN (although there is no legal right to this).
Employers therefore have two main approaches when seeking to negotiate a departure: adhering to the without prejudice principle to encourage settlements out of court, or seeking to achieve a pre-termination negotiation. However both have drawbacks and limitations and employers need to tread carefully.
This article is drawn from the talk that Mark gave at the recent Fox Williams HRLaw employment seminar.