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.


With all the recent press regarding ‘no fault dismissals’ and ‘Settlement Agreements’, it is no wonder employers are confused with regards to what they can and can’t do when it’s time to part ways with an employee.

Fundamentally, reasonableness and due process should remain at the heart of what we do, however, there comes a time when even the most patient of employers says enough is enough.  When resolving any employer/employee dispute, it is important for employers to recognise that no action is without risk.  Even the most carefully executed process will not prevent a motivated ex-employee from raising tribunal proceedings and potentially being successful.

However, we all know that the riskiest business of all are dismissals that come as a result of an ‘off the record’ conversation, often held on what an employer thinks is a ‘without prejudice’ basis.  So when is the right time to have such a conversation and on what basis?  Whilst the Government has shelved plans to allow so called, ‘no fault dismissals’, which were tabled as part of the Employment Law Review, this summer, it is expected that we will see the introduction of ‘Settlement Agreements’, an updated version of what we have all come to know as ‘Compromise Agreements’, through which an employer can gain protection from unfair dismissal claims.  These ‘Settlement Agreements’, will come at the end of a process that will begin with a proposal to end the employment relationship which can be tabled by either the employer or indeed the employee.

Using standard templates and ACAS code of practice, employers will be guided end to end through the process.  Whilst all this sounds favourable for the employer, it is important to note that this process will only offer protection in unfair dismissal claims.  Claims that include other breaches such as discrimination, evidence of automatic unfair dismissal, e.g. Whistleblowing, or where there is evidence of ‘improper behaviour’, such as coercion will not be protected. It is also important to note that any conversations held prior to obtaining a signed ‘Settlement Agreement’, can still be admissible in Employment Tribunal proceedings, unless held on a ‘without prejudice’ basis.

The rules for such a conversation are that they should be only be held in ‘a genuine attempt to settle a dispute’ and both parties should be aware of exactly what that means.  This suggests that employers should explain fully what ‘without prejudice’ means, prior to the commencement of such discussions, preferably in writing; and should remind the employee of the same at the start of any face to face or telephone discussions.

Whilst Solve. welcome the Governments plans to ease the ending of fractious employment relationships, it is clear that this particular process is not black and white.  Therefore, even if you believe that you have a straightforward case of unfair dismissal, we would suggest that you review any proposals for ending the employment relationship with a specialist HR and Employment Law practitioner.

If you have any questions or would like some more advice please contact us on