Can we have a chat?

When employment relationships are under strain, employers and employees can often find it useful to have an “off the record” chat to see whether there is another way forward.

The risk though has always been that something said “off the record” comes back to haunt the person who said it, whether through an innocent misunderstanding as to the nature of the conversation or by a more cynical party looking to exploit the conversation for their own advantage.

Historically employers and employees relied on the “without prejudice” rule which, in certain circumstances, enables employer and employee to put forward offers and to make concessions that neither party will subsequently be able to rely on in Tribunal.    A key requirement for a discussion to be genuinely without prejudice is that there must be an existing dispute between the parties which the discussion is seeking to resolve.

To supplement this, in 2013, the government introduced a new right for an employer and employee to engage in settlement discussions in relation to the termination of employment, without the need for an existing dispute.   Whilst this does appear to be useful in theory, its value in practice is limited as it will only prevent the parties relying on those discussions in ordinary unfair dismissal cases.  Crucially, anything said would be still be admissible in discrimination proceedings as well in automatic unfair dismissal cases (e.g. on maternity grounds) and breach of contract cases.

A recent Employment Appeal Tribunal case (Faithorn Farrell Timms LLP v Bailey) added a twist to the interaction between without prejudice privilege and the pre-termination negotiations rules.   In that case discussions had been ongoing, but didn’t reach a resolution and ultimately the parties ended up before an Employment Tribunal.  At the Tribunal the employee sought to rely on the discussions and both parties appealed to the EAT.

The EAT concluded that the pre-termination negotiations rules apply not only to the content of those negotiations, but also to the mere fact that negotiations have taken place as well as the internal discussions within the employer about the protected negotiations.   In addition, the EAT concluded that, unlike without prejudice privilege (which the parties are able to waive as the Tribunal found that they did in this case), pre-termination negotiations cannot be considered by a Tribunal even if the parties might want it to.

So, can we have a chat?  Absolutely, but go carefully and unless you are sure that a discussion is genuinely without prejudice don’t say more than you would be comfortable explaining to a Judge.