Pre-termination agreements – what protection do employers have?

Pre-termination agreements – what protection do employers have?  

Following a recent case, please note this vital reminder about pre-termination negotiations and when to use them to protect your company.

You will not be protected by the normal 'without prejudice' badge in communications with an employee if there is no current dispute, for example, where things are not working out. The reason for this, is that the dispute at this point does not exist. 'Without prejudice' can only be used during a settlement where an employee is aware of the employment dispute. 

To protect the business where there is no current dispute, you must use the phrase 'Pre-termination negotiations under Section 111A of the ERA 1996' in all settlement discussions and communications. 

A settlement agreement can be made on a confidential basis under Section 111A of the ERA 1996, which means it cannot be used as evidence in an unfair dismissal dispute. Here, a pre-termination negotiations can be treated as confidential even where there is no current employment dispute or where the employee is unaware that there is an employment issue. 

Whistleblowing or protected disclosure are not covered by the confidentiality of section 111A. If unsure, seek advice.

Section 111 A also applies to offers of settlement where there is a dispute between the company and the employee; the 'without prejudice' principle can also be used in this case. 

In a recent case, Mrs S Garrod v Riverstone Management Ltd, the employment appeal tribunal (EAT) eventually dismissed Mrs Garrod’s appeal to allow references to the contents of a discussion between her and her employer, which was labelled as 'without prejudice' in her discrimination and harassment claim. However, please take note, this case went all the way to an EAT because the company hadn’t protected itself by using Section 111A in the discussions.

*thelegalpartners.com

Please contact your SSG advisor if you wish to enter into a settlement agreement, ‘without prejudice’ or ‘protected conversation’ with an employee. This process will need guidance, careful management, and legal documentation.