Ten years on: Protected Conversations and S111A Employment Rights Act 1996

S111A ERA 1996 allows an employer to conduct confidential discussions with an employee to agree terms for the employee’s exit. A decade on from the introduction of this provision, we consider its application in practice and why it remains underused.

S111A ERA 1996 introduced the concept of a ‘protected conversation’ between an employer and an employee and acts as a supplement to the common law ‘without prejudice’ rule - however, there are some key differences between the two.

The ‘without prejudice’ rule prevents any statements made during a without prejudice conversation from being used in a Tribunal as evidence in any type of claim - but this protection can only be relied upon if there is an existing dispute between the parties. Meanwhile, a ‘protected conversation’ attempts to offer greater flexibility because it allows confidential discussions to be initiated as a means of ending the employment relationship on agreed terms before any formal dispute has arisen between the parties. However, protected conversations are only inadmissible as evidence in the context of an ordinary unfair dismissal claim which considerably limits their usefulness in practice. 

The government’s objective when introducing protected conversations was that they would give employees and employers the option to end the employment relationship both swiftly and amicably without the need to wait for a formal dispute to arise. The benefit of this is that it enables an employer to actively manage their workforce, rather than simply reacting to an employee’s misconduct, grievance or poor performance, as the case may be. This can be useful in certain scenarios – for example, in a situation where an employer wants to move quickly and avoid lengthy internal proceedings, or where the employment relationship is not working out but there is not a sufficient reason to commence a formal process.

Therefore, on the face of it, protected conversations seem like a great solution for employers because it gives them the opportunity to discuss ways forward without the risk of the conversation being disclosed in any subsequent ordinary unfair dismissal claim. Yet, in reality, protected conversations must be used with caution because the protection that they provide is considerably limited. Protected conversations will still be admissible in Tribunal where there is a claim for any kind of discrimination, harassment or victimisation, wrongful dismissal, breach of contract, detriment claims or claims of automatic unfair dismissal. As such, employers run the risk of a protected conversation being brought to the attention of a Tribunal in the event that the employee brings one of these claims. It is rare these days for a claim of unfair dismissal to be the only potential claim arising out of a termination situation, which means that the protected conversation regime has little appeal for employers. Of course, given the protected conversation is held with a view to terminating employment on agreed terms, if the employee agrees to those terms and signs up to a settlement agreement, the issue of whether any pre termination discussions are admissible becomes a moot point as all claims are settled. However, employers should still bear this in mind when considering whether or not to rely on s111A ERA 1996 in case a settlement cannot be agreed upon.

So, where an employer has concerns that the content of termination discussions might be used to bring claims other than ordinary unfair dismissal, it is advisable to ensure that without prejudice discussions take place instead provided there is an existing dispute between the parties, normally requiring some form of formal process to have been commenced. This limits the value of protected conversations somewhat and their narrower scope has led some to comment that the government did not go far enough when introducing the statutory provision. It may also explain why they have remained relatively underused over the last decade.

There are also other requirements that apply to a protected conversation under s111A ERA 1996 – for example, an employee must be given at least 10 calendar days to consider any settlement offer presented to them and the protection of s111A ERA is also lost if the employer demonstrates improper behaviour during the conversation. Employers also need to bear these in mind if they are seeking to rely on the protection offered by s111A.

So, what does the future look like for protected conversations? It was thought that the government’s initial proposals for s111A 1996 were scaled down significantly due to the potential of challenges under European Union law. This was because any law which restricted a claimant’s ability to rely on relevant evidence in discrimination cases was very likely to be contrary to EU Equality Directives. Now that the UK has left the European Union, this is no longer a constraint. Therefore, whilst this is not something that looks to be on the agenda at present, it is possible that in future we could see protection broadened under s111A 1996. In the meantime, employers should be alive to the risks associated with protected conversations and continue to treat them with due care.