As of 29 July 2013 it became possible for employers to have “confidential” pre termination negotiations with employees whom there are not existing disputes with. This statutory provision (enacted by the Enterprise and Regulatory Reform Bill) was brought in to facilitate frank discussion between employer and employee, however, it may cause more headaches for employers than it addresses.

The main issue with this provision is that it only prevents the disclosure of discussions in Unfair Dismissal claims. The discussions could still be referenced in discrimination claims or dismissals that fall under the category of “automatically unfair” dismissals, such as ones involving whistleblowing. Pre termination discussions will also be admissible in Unfair Dismissal claims where it is purported that there has been “improper behaviour” on the part of the employer. What constitutes “improper behaviour” is not covered in the legislation so we will need to look to future case law for guidance.

In the meantime ACAS have published a Code of Practice which is not statute but can be viewed as best practice.  For instance, they suggest ten days a “reasonable” time to consider a settlement proposal.

Employers looking to utilise this new provision should seek expert employee relations advice first. In particular, they will need to be satisfied that there is no grounds for a discrimination claim, and that having followed ACAS’ Code of Practice they could not be considered culpable of “improper behaviour”.

If agreement is reached the negotiations will be tied up in “Settlement Agreements”, which employees will have to be independently advised on by a solicitor. It should be noted that the Employers (as with Compromise Agreements) will foot the cost of this independent advice.

Vince Cable’s long championed protected conversations have usefully added to the tools at an employer’s disposal, however, even the most well intentioned employers should seek advice before pursuing this course of action.