The recent Employment Appeal Tribunal ("EAT") judgment in the case of Tarbuc v Martello Piling Limited is an important warning for employers as to the limitations of protected conversations, and how "improper behaviour" can strip the discussion of its protected status.
Background
The claimant was invited to a pre-termination meeting by his employer to discuss a proposed redundancy. The employer intended the discussion to be protected under section 111A of the Employment Rights Act 1996. Section 111A renders pre-termination negotiations inadmissible in ordinary unfair dismissal proceedings, subject to some exceptions including improper conduct.
Following his dismissal, the claimant brought claims for unfair dismissal, unlawful deduction from wages and less favourable treatment as a part-time worker. At a preliminary hearing, the claimant argued that section 111A did not apply to the pre-termination meeting and the discussions should therefore be admissible as evidence. The tribunal rejected his argument, holding that section 111A did apply, and excluded evidence from it in respect of all three claims brought by the claimant.
The claimant also argued that the meeting had been improperly conducted because he was called to it without prior warning or the opportunity to be accompanied. He also felt "ambushed" and was given limited time to consider the settlement proposal. The tribunal also rejected this argument.
The claimant appealed to the EAT.
EAT judgment
The EAT had no difficulty in concluding that the tribunal had been mistaken when applying section 111A to the unlawful deduction and part-time worker claims in addition to the unfair dismissal claim - in fact, both parties consented to this finding. Evidence on the protected conversation was admissible insofar as it related to the unlawful deductions claim and the part-time worker claim.
The EAT also concluded that the tribunal had failed to give proper consideration to the ACAS Code of Practice on Settlement Agreements ("the Code"). The Code sets out good practice on issues including the conduct of pre-termination meetings, including improper conduct. In particular, the claimant argued that the tribunal had failed to consider the cumulative effect of having been "ambushed" in the corridor before the meeting, not being afforded time to secure a companion to accompany him and the short timeframe he was given to consider the offer. The EAT found that the tribunal had taken too narrow an approach when assessing whether the employer had acted improperly. It had focused only on what was said during the meeting, rather than considering the wider circumstances around how it had been arranged and conducted. The case was remitted back to a different tribunal for reconsideration.
What does this mean for employers?
When proceeding with a protected conversation, employers need to be aware that, if an employee subsequently brings claims before an employment tribunal, evidence of the meeting will be inadmissible only in connection with ordinary unfair dismissal claims. Should additional claims be made, such as discrimination claims, evidence of the meeting would be admissible, if relevant to those claims.
Beyond that, it is difficult to say exactly what this case means as the gist of the decision is that the tribunal failed to consider the question of improper conduct properly and a new tribunal will now require to consider this point. What we can say is that employers should make themselves aware of the content of the Code and ensure that good practice is followed. That said, the Code makes reference, for example, to arranging a companion. In practice, this is very often not done and it is not a legal requirement. Inviting an employee to bring along a companion in these circumstances is often unhelpful as, given the nature of many settlement discussions, an employee will often prefer to keep the content and circumstances private when the overall effect of the departure is to allow the employee to leave in a managed, face saving, way.
It is, though, important that employers act in a way that does not put undue pressure on an employee to enter into a settlement agreement, as that is an area where a tribunal may well decide that the discussions should be admissible. It is therefore important that an employee is given a reasonable period of time to consider the offer and enter into the settlement agreement.
We are seeing, with increasing regularity, circumstances where an employee is given only a very short timeframe from an oral offer being made to the point when they are expected to have taken legal advice and signed the settlement agreement. Employers who operate in this way are running the risk of a successful "improper conduct" argument.
Another situation to avoid, which existed in the Tarbuc case, is telling the employee that if they do not sign the settlement agreement then they will be dismissed, as opposed to it merely being a possibility (for example in a redundancy or disciplinary situation).
The best way to proceed will depend on the circumstances, but careful planning and fairness remain the best safeguards for employers intending to have a protected conversation with an employee.
