High bar for improper behaviour in protected conversations

High bar for improper behaviour in protected conversations

If you have a protected conversation with an employee with a view to ending their employment on agreed terms, you must not behave improperly. Why is this and what has the Employment Appeal Tribunal (EAT) said about improper behaviour?

What is a protected conversation?

A "protected conversation" (also known as a "pre-termination negotiation") is a statutory concept. It enables you to have a discussion with an employee aimed at ending their employment on agreed terms without it being admissible as evidence in tribunal proceedings. Unlike "without prejudice" discussions, protected conversations can take place where there's no existing dispute with the employee. However, protected conversations have limitations, including: (1) they are only inadmissible in ordinary unfair dismissal claims, so you wouldn't be able to exclude them from evidence in automatic unfair dismissal or discrimination claims; and (2) the protection won't apply if there has been "improper behaviour" on your part. The Acas Code of Practice on Settlement Agreements says this can include putting "undue pressure" on the employee, such as by not giving them reasonable time to consider the settlement agreement (and it suggests a minimum of ten calendar days should be allowed) or telling them they will be dismissed if they reject your offer, even before any disciplinary process has begun.

Settlement offer

In Gallager v McKinnon's Auto and Tyres Ltd 2024, Gallagher (G) was invited to a meeting with the directors purportedly to discuss his return from sick leave. However, whilst he had been absent, they had found they could cover his role and so, during that meeting, he was presented with a settlement offer to terminate his employment. He was given 48 hours to consider it and told that, if he didn't accept, they would start a redundancy procedure. G refused the offer, was dismissed and claimed unfair dismissal. He sought to include the meeting in evidence. The tribunal held it was an inadmissible protected conversation. G appealed.

Improper behaviour

The Employment Appeal Tribunal (EAT) rejected G's appeal. It ruled there had been no improper behaviour because: (1) although it may have been unfair to G to mislabel the meeting, it was not improper; (2) although G was only given 48 hours to respond to the settlement offer, it was clear this deadline only related to responding to the verbal offer and, had he accepted it, he would then have had longer to consider a written settlement agreement; and (3) although G was told his role would be redundant if he rejected the offer, that didn't inevitably mean he would be dismissed, e.g. he may be redeployed. That was different to telling an employee they will be dismissed for misconduct even before a disciplinary process has begun .

Tip. This case is good news as it sets a high bar for an improper behaviour finding and validates some common employer practices, such as inviting an employee to a protected conversation with no prior warning or asking them to confirm whether they want to accept a settlement offer "in principle" within a few days but then giving them longer to consider the written settlement agreement terms.

Trap. Don't indicate that a dismissal decision has already been made. However, you can advise that a redundancy or disciplinary process will commence if the settlement offer isn't accepted.

The statutory protection that prevents the conversation being admissible as evidence in an ordinary unfair dismissal claim won't apply where you have engaged in improper behaviour. However, the EAT has set the bar high for improper behaviour and provided some clarity on when your conduct might cross the line into being undue pressure.

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