“Are pre-termination negotiations admissible as evidence in unfair dismissal claims?”

In 2013 the Government introduced the concept of a “protected conversation” under section 111A of the Employment Rights Act 1996.

Section 111A allows an employer or employee to make an offer to end the employment relationship on a confidential basis, and that offer cannot then be used as evidence before an employment tribunal in an unfair dismissal claim only. ACAS published non-statutory guidance about the use of section 111A.

Section 111A added to the long-established legal principle of “without prejudice” privilege which, in broad terms, recognises the public benefit of allowing parties to an existing dispute to make “without prejudice” offers to settle that dispute without fear of these being disclosed to the court or tribunal if they are rejected the other party.

However, the recent case of Basra v BJSS (UKEAT/0090/17/DA) established the following exception to the provision of 111A: if the effective date of termination of an employee’s employment is in dispute between the parties, any pre-termination negotiations will be admissible as evidence before an employment tribunal.

Background facts

In this case, the Claimant was an architect who had been employed by the Respondent since September 2013. He was a highly regarded employee until the early part of 2016 when the Respondent began to receive complaints and concerns about his work from clients.

The Respondent subsequently invited the Claimant to a disciplinary hearing. At the same time, the Respondent sent the Claimant a “without prejudice and subject to contract” offer to end his employment with three months net salary.

On 3 March 2016, the Claimant responded to the Respondent by email accepting the without prejudice offer subject to contract. The email also stated that ‘today’ would be his last day and the Claimant did not return to the office. No Settlement Agreement was entered into by the parties.

The Claimant later brought a claim in the Employment Tribunal for unfair and wrongful dismissal. Within those claims, he argued that his termination date was 15 March 2016 pursuant to a letter he had received from the Respondent.

At the hearing, the Respondent referred the Employment Tribunal to the Claimant’s email of 3 March 2016 accepting the without prejudice offer and argued that this constituted a mutually agreed termination date of 3 March 2016.

The Employment Tribunal dismissed the claim, holding that the Claimant had not been dismissed by the Respondent but rather resigned. They also held that section 111A of the Employment Rights Act did not prohibit them from taking into account the Claimant’s acceptance email of 3 March 2016 in coming to their decision.

The Claimant appealed to the Employment Appeal Tribunal and was successful. Mr Justice Choudhury held that:

“the Tribunal erred in concluding that the acceptance email (without reference to the WP offer) amounted to an unambiguous resignation”.

The case has now been remitted back to the Employment Tribunal to reconsider its decision as to the effective date of termination (taking into account the without prejudice offer and other pre-termination negotiations).

Comment

Although pre-termination negotiations can be particularly useful for both employers and employees when looking to terminate an employment relationship, the decision reached by the Employment Appeal Tribunal in the case of Basra v BJSS serves as a reminder that the content of such negotiations may, in fact, be admissible as evidence in unfair dismissal claims if the date of termination is in dispute. Parties should be absolutely clear in their correspondence as to the basis upon which they are making or accepting offers and obtain legal advice on their position.