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Pre-Termination Negotiations: How confidential are they?
From the 29th July 2013, with the aim of avoiding litigation/promoting settlement, the Government will introduce new legislation allowing “pre-termination negotiations” to remain confidential in future unfair dismissal cases.
Further, Compromise Agreements will be renamed Settlement Agreements – a simple name change.
Confidentiality of Pre-Termination Negotiations
Under section 111A of the Employment Rights Act 1996, pre-termination negotiations are prevented from being referred to in evidence in unfair dismissal cases (there are exceptions to this rule) and can be relied upon even where there is no on-going employment dispute (such as disciplinary, capability, performance etc issues). It is in essence an extension to the 'without prejudice' principle.
The main differences between s111A and the 'without prejudice' principle is that parties can rely on s111A even if there is no on-going employment dispute (unlike the 'without prejudice' principle). However, unlike the 'without prejudice' principle which affords protection against all claims, s111A only affords protection in relation to any subsequent unfair dismissal claims.
As a general rule, it is advisable for employers to try, wherever possible, to continue to rely on the ‘without prejudice’ principle.
Although s111A does offer protection for the confidentiality of pre-termination negotiations, it is only applicable for unfair dismissal claims. As such, if there is a risk of other claims being alleged following a discussion, such as breach of contract or discrimination, there is a risk that no protection will be afford under s111A in relation to those claims and as such the pre-termination negotiations could be used as evidence in court or tribunal proceedings.
For a more detailed look at the change and some useful practical guidance on how to conduct such discussions, HR³ clients can access two Manager’s Guidance Notes on our HR³ iToolkit called “How to Conduct Pre-Termination Negotiations” and “How to Conduct Without Prejudice Meetings”. Alternatively, contact a member of the team with any questions.