What is a Protected Conversation?

A protected conversation is commonly used to describe confidential pre-termination negotiations between an employer and an employee under section 111A of the Employment Rights Act 1996.

It allows an employer or employee to discuss the possibility of ending the employment relationship on agreed terms, even where there is no existing dispute between them.

For example, your employer may propose:

• A Termination date
• A Financial payment
• Notice arrangements
• An Agreed reference
• Other terms governing your departure

If agreement is reached, the terms would normally be recorded in a Settlement Agreement.

A protected conversation is voluntary. You do not have to accept an employer's proposal simply because one has been made.

Why is it Called "Protected"?

The word "protected" refers to the fact that section 111A can prevent qualifying pre-termination negotiations from being used as evidence in certain Employment Tribunal proceedings.

However, the protection is not absolute.

Section 111A principally protects qualifying discussions from being used in an ordinary unfair dismissal claim.

It does not automatically prevent the discussions from being relied upon in every type of employment claim.

For example, section 111A does not generally provide the same protection in claims involving:

• Discrimination
• Harassment
• Victimisation
• Whistleblowing
• Automatically unfair dismissal
• Wrongful dismissal
• Breach of contract
• Unlawful deduction from wages

Whether a particular conversation can later be referred to therefore depends on the type of claim, the circumstances of the negotiations and whether another form of confidentiality, such as the without prejudice rule, applies.

How Might Your Employer Start a Protected Conversation?

Your employer may invite you to a private meeting to discuss the possibility of an agreed termination.

It may also approach you:

• In writing
• By email
• Through Human Resources
• Through a solicitor or representative

The employer may expressly state that the discussion is being held under section 111A of the Employment Rights Act 1996.

It may also describe the meeting as:

• A Protected conversation
• A Confidential discussion
• A Pre-termination negotiation
• A Settlement discussion

The label used by the employer is not, by itself, decisive. Whether the statutory protection actually applies depends on the circumstances and the law.

Why Might an Employer Want a Protected Conversation?

Protected conversations can arise in many workplace situations.

They are commonly used where there are concerns involving:

• Poor performance
• Capability
• Personality clashes
• Relationship breakdown
• Attendance
• Conduct
• Pending disciplinary action

An employer may consider that an agreed exit would be preferable to continuing with a lengthy performance, capability or disciplinary procedure.

Section 111A can apply even where there is no existing dispute between the employer and employee.

In fact, this is one of the important differences between section 111A protection and the traditional without prejudice rule.

A protected conversation does not itself mean that you have done anything wrong or that you are required to leave.

What if Your Employer Mentions a Settlement Agreement?

A settlement agreement is the legal document that can record the terms agreed following settlement negotiations.

It may cover matters such as:

• Termination date
• Compensation
• Notice pay
• Holiday pay
• Bonus or commission
• Reference wording
• Confidentiality
• Restrictive covenants
• Legal fees

A settlement agreement is voluntary.

For it to validly waive statutory employment claims, you must receive advice about the agreement and its effect from an appropriately qualified independent adviser, together with satisfying the other statutory requirements.

You should therefore not feel obliged to sign an agreement simply because your employer has presented one.

For further guidance, see Settlement Agreements.

What if There is Already a Dispute?

If there is already a genuine dispute between you and your employer, settlement discussions may instead, or additionally, be protected by the without prejudice rule.

Without prejudice protection is different from section 111A.

For the traditional without prejudice rule to apply, there must generally be:

• An Existing dispute
• A Genuine attempt to settle that dispute

A dispute does not necessarily require court or Tribunal proceedings to have already started.

However, there must normally be a real disagreement or the reasonable contemplation of a legal claim rather than merely the possibility that a disagreement might arise in the future.

For example, the fact that an employer announces a restructuring or proposes a redundancy does not automatically mean that an existing legal dispute has arisen.

Can Section 111A and Without Prejudice Protection Apply Together?

Yes.

Where there is an existing dispute and the parties discuss terminating employment on agreed terms, the same negotiations may potentially be protected by:

• Section 111A
• The Without prejudice rule

The two forms of protection are not identical.

Section 111A can operate without an existing dispute but applies only to particular unfair dismissal proceedings.

Without prejudice protection requires an existing dispute and a genuine attempt to settle it, but can potentially apply to a much wider range of legal claims.

Employers sometimes use wording referring to both protections.

Whether either protection applies will ultimately depend on the substance of the discussion rather than simply the heading placed on an email or letter.

What Claims Are Not Protected by Section 111A?

Section 111A does not provide confidentiality protection for every Employment Tribunal claim.

In particular, its protection does not generally extend to claims involving automatically unfair dismissal.

These can include dismissals connected with matters such as:

• Whistleblowing
• Certain health and safety activities
• Trade union rights
• Asserting certain statutory rights

For further guidance, see Whistleblowing and Unfair Dismissal.

Section 111A also does not generally protect settlement discussions from being used in separate claims involving:

• Discrimination
• Harassment
• Victimisation
• Wrongful dismissal
• Breach of contract
• Unlawful deductions from wages

For further guidance, see Discrimination, Bullying at Work and Wrongful Dismissal.

Can You Refer to a Protected Conversation in a Discrimination Claim?

Potentially, yes.

Section 111A itself does not prevent settlement discussions from being used in a discrimination claim.

However, if there was already an existing discrimination dispute and the negotiations were genuinely aimed at settling that dispute, the separate without prejudice rule may prevent those discussions from being used as evidence.

The position can therefore depend on whether:

• There was an existing dispute
• The discussion was a genuine attempt to settle it
• Section 111A applied
• Without prejudice protection applied
• Improper conduct occurred

For example, where there was no existing dispute and an employer made discriminatory comments while proposing a settlement, those comments may potentially be admissible in a later discrimination claim.

Can the Same Conversation Be Treated Differently in Different Claims?

Yes.

This is an important feature of section 111A.

For example, an employee might bring both:

• An Ordinary unfair dismissal claim
• A Discrimination claim

The protected conversation may potentially be inadmissible in the ordinary unfair dismissal claim under section 111A while still being admissible in the discrimination claim.

The position may change if there was improper behaviour during the negotiations or if the without prejudice rule independently applies.

It is therefore incorrect to assume that once a conversation is described as "protected", nobody can ever refer to it in any future proceedings.

How Can a Protected Conversation Lose Its Protection?

Section 111A contains an important exception where there has been improper behaviour in connection with the negotiations.

What amounts to improper behaviour will depend on the circumstances and is ultimately a matter for an Employment Tribunal.

The Acas Code of Practice provides examples of behaviour that may be improper.

These can include:

• Harassment
• Bullying
• Intimidation
• Offensive behaviour
• Physical assault
• Threats of physical assault
• Other criminal behaviour
• Victimisation
• Discrimination
• Undue pressure

The list is not exhaustive.

What Can Amount to Undue Pressure?

The way in which a settlement proposal is presented can be important.

For example, improper pressure may potentially arise where an employer tells you, before any appropriate disciplinary process has begun, that you will definitely be dismissed if you refuse the settlement proposal.

There is a distinction between:

• Explaining honestly what may happen if agreement is not reached
• Predetermining dismissal and using it as a threat to force acceptance

An employer can explain that a disciplinary, capability or redundancy process may continue if you reject an offer.

It should not improperly pressure you into accepting terms.

How Long Should You Be Given to Consider an Offer?

Acas recommends that employees should generally be given at least 10 calendar days to consider the formal written terms of a settlement agreement and obtain independent advice, unless the parties agree otherwise.

This is a general recommended period rather than an absolute statutory minimum applicable in every case.

The circumstances may justify more time, for example where:

• The agreement is particularly complicated
• You require a reasonable adjustment
• Relevant financial information is outstanding
• Your adviser needs further information

Giving an employee an unreasonably short period, particularly together with threats or pressure, may contribute to a finding of improper behaviour.

What Happens if There Has Been Improper Behaviour?

Improper behaviour does not necessarily mean that every part of a protected conversation automatically becomes admissible.

Under section 111A, where something has been said or done improperly, or is connected with improper behaviour, the statutory confidentiality protection applies only to the extent that the Employment Tribunal considers just.

The Tribunal therefore has to consider the particular circumstances.

This is more precise than saying that one inappropriate comment necessarily removes protection from the entire negotiation.

What if Without Prejudice Protection Also Applies?

Where there is an existing dispute, settlement discussions may additionally be protected by the without prejudice rule.

The exception under the traditional without prejudice rule is narrower and generally involves unambiguous impropriety.

This can include particularly serious conduct such as:

• Blackmail
• Fraud
• Serious intimidation
• Physical violence
• Unlawful discrimination in appropriate circumstances

The tests for improper behaviour under section 111A and unambiguous impropriety under the without prejudice rule are not identical.

This is another reason why the admissibility of settlement discussions needs to be considered carefully.

Can Improper Behaviour Amount to Constructive Dismissal?

Potentially, but not automatically.

Where the employer's conduct during a protected conversation is sufficiently serious, it could form part of circumstances alleged to amount to a fundamental breach of the employment contract.

An employee might therefore consider whether there is a potential Constructive Dismissal claim.

However, the existence of improper behaviour under section 111A does not automatically establish constructive dismissal.

Constructive dismissal has its own legal requirements, including the need for a sufficiently serious contractual breach and a resignation in response to that breach.

Resignation should therefore be considered very carefully before any decision is made.

Should You Obtain Advice at an Early Stage?

It can be sensible to obtain advice as soon as your employer proposes a protected conversation, rather than waiting until the settlement agreement has already been finalised.

At an early stage, you may need to consider:

• Why the employer has approached you
• Whether the offer is reasonable
• What claims you may have
• Your notice entitlement
• Any bonus or commission
• Holiday pay
• Pension or benefits
• Restrictive covenants
• Appropriate compensation
• Reference wording

You may also need advice about whether discussions are genuinely protected by section 111A, the without prejudice rule or both.

If you agree the financial terms too early and later discover that important rights or claims were overlooked, renegotiating the package may become considerably more difficult.

The final settlement agreement should therefore be considered carefully before it is signed.