We decided we needed to get rid of a female employee and used the new procedures to have a ‘without prejudice’ conversation. We gave her 24 hours to think about the draft Settlement Agreement which we gave her and told her which solicitors we were prepared to pay to sign it off. She has said that this is wrong and that:
- We should have given her more time.
- We should have allowed her to be accompanied.
- We should have allowed her to choose her own solicitor.
She also says that what we have done is discriminatory. Is she right?
Peter Replies:
A properly made offer of settlement cannot be used as evidence to an Employment Tribunal in any subsequent unfair dismissal claim. In effect, this extends the scope of the ‘without prejudice’ regime to situations where no formal dispute has yet arisen. You are not covered by the without prejudice rules as there is no existing employment dispute.
Such discussions, or Protected Conversations or Pre-Termination Negotiations as they are usually called, leading to a proposed Settlement Agreement can be treated as confidential even where there is no current
dispute. This confidentiality can be lost if there’s ‘improper conduct’. In other words the conversation would be admissible in an unfair dismissal claim at an Employment Tribunal hearing. The response to your employee’s claims is as follows:
- Giving your employee only 24 hours to consider the Settlement Agreements looks like you have applied undue pressure (improper conduct) and you will not be able to keep this ‘off the record’ if she decides to make a claim. A minimum period of ten calendar days should be allowed to consider the proposed terms of a settlement agreement and to receive independent advice, unless the parties agree otherwise.
- A Settlement Agreement requires independent legal advice, but just because the employer normally pays for legal ‘advice’, it does not give them a right to determine who that legal adviser should be.
- Although there is no statutory right for the employee to be accompanied at any meeting to discuss the agreement, the ACAS Code says ‘employers should allow employees to be accompanied at the meeting by a work colleague, trade union official or trade union representative’. Employers should consider allowing this when meetings are held, as it can help progress settlement discussions.
An employer might initiate settlement discussions in the expectation they will be inadmissible, only for the employee to challenge later by alleging that there was, for example, a discriminatory reason for the subsequent dismissal. Protection only extends to normal unfair dismissal claims (express and constructive). What you have done is probably not discriminatory but if she subsequently makes a discrimination claim, a Tribunal would review your actions in deciding a finding of discrimination.
You should contact her immediately to tell her that she can have more time, may choose her own solicitor and ask her why she thinks you have discriminated against her. You will then need to act on anything she says to support her assertion.
To summarise:
- You must give an employee plenty of time, (usually 10 days) to consider the terms of a Settlement Agreement.
- You cannot dictate which solicitor an employee should use.
- Consider allowing an employee to be accompanied to any meetings held to discuss the Settlement Agreement.
The guidance provided in this article is not legal advice as every case depends upon the facts. The law is forever changing and you need to keep up with these changes. Before you take any action, make sure that you know what you are doing, or call us for specific advice.
