New rules on confidential pre termination negotiations

Posted 10/07/2013

New rules governing evidence of ‘pre-termination negotiations’ in Tribunal proceedings are to come into force on 29 July 2013 (the same date the new Tribunal Rules of Procedure and Tribunal Fees are implemented). Compromise Agreements will be renamed ‘Settlement Agreements’ at the same time.Under the new provisions, employees and employers will be able to enter into certain confidential, pre-termination negotiations which will be inadmissible in any ordinary unfair dismissal Tribunal proceedings. ‘Negotiations’ refers to any discussion or offer of proposed settlement terms. This means that the concept of ‘without prejudice’ discussions has effectively been extended to situations where no formal dispute has actually arisen (the employee may even be unaware that a problem exists) and where, as a result, the normal ‘without prejudice’ protection would not apply.There are, however, some important exceptions to the application of the new rule. Claims that relate to an automatically unfair reason for dismissal, such as whistleblowing, union membership, or asserting a statutory right, are not covered by the new provisions. Neither are claims made on grounds other than unfair dismissal, such as claims of discrimination, harassment, victimisation or other behaviour prohibited by the Equality Act 2010, or claims relating to breach of contract or wrongful dismissal.The new rule will also not apply to anything that the Tribunal considers improper or connected with ‘improper behaviour’. Improper behaviour is not defined, and it will ultimately be for a Tribunal to decide based on the facts and circumstances of each case. However, examples are given in the recently published ACAS* Code of Practice on Settlement Agreements, which includes all forms of harassment, bullying and intimidation, physical assault and putting ‘undue pressure’ on a party. This includes an employer not allowing an employee a minimum of ten calendar days to consider a formal offer, or stating that dismissal is inevitable, or an employee threatening to undermine an organisation’s public reputation. ACAS will also publish more detailed non-statutory guidance to accompany the Code.It remains to be seen whether employers will take advantage of the new rule, and there are undoubtedly drawbacks in terms of its limited scope and the issues identified above. In practice, it is still probably going to be safer for employers to have taken some steps to discipline or performance manage the employee using ‘open’ conversations before seeking to rely on the confidentiality of pre-termination negotiations.* Advisory, Conciliation and Arbitration ServiceFor further information and advice, please contact our Employment Team.