Without Prejudice Conversations and Protected Conversations: Key Differences and Guidelines

There are times in the employment relationship, that either the employee or the employer has reached a point where it may be best to consider parting company on amicable terms. Sometimes that will be because there is an ongoing dispute that both parties are aware of and at other times, things are just not working out.

An amicable way of parting company is where an agreement is reached, either via a Settlement Agreement or agreeing COT3 terms via ACAS. But how do you get there, when the employee may not have approached ACAS for Early Conciliation as part of a claim they may have? You have the right conversations without improper conduct from either party.

It’s important for both employers and employees to understand the concepts of without prejudice conversations and protected conversations. While they both aim to facilitate confidential discussions, they differ significantly in their legal basis, scope, and applicability.

What Are Without Prejudice Conversations?

Without prejudice conversations are discussions aimed at resolving disputes between parties. These conversations are legally protected, meaning that anything said during them cannot be used as evidence in court or tribunal proceedings, sometimes referred to as ‘off the record conversations’. However, this protection applies only if there is a genuine dispute between the parties at the time of the conversation.

Key Features:
• Legal basis: Derived from common law principles
• Scope: Covers settlement discussions when a dispute exists.
• Applicability: Used to settle claims that may otherwise proceed to litigation.
• Confidentiality: Statements made in these discussions cannot be referred to in court or tribunals unless both parties agree.

Limitations:
Without prejudice protection does not apply:

1. If there is no genuine dispute between the parties.
2. In cases of improper conduct (e.g., threats, harassment, or undue pressure).
3. If the conversation involves criminal or fraudulent activity.

What Are Protected Conversations?

Protected conversations, introduced under Section 111A of the Employment Rights Act 1996, allow employers to have confidential discussions with employees about ending their employment. Unlike without prejudice conversations, they do not require a pre-existing dispute.

Key Features:
• Legal Basis: Statutory provision under Section 111A ERA 1996.
• Scope: Applies to conversations about termination of employment.
• Applicability: Can be initiated without a formal dispute, as long as the purpose is to explore a mutual agreement (e.g., a settlement agreement).
• Confidentiality: Prevents such discussions from being referred to in unfair dismissal claims

Limitations:
Protected conversations do not offer protection in:
1. Claims other than unfair dismissal, such as discrimination, harassment, or breach of contract.
2. Cases involving improper conduct by the employer or employee.

Improper Conduct in Without Prejudice and Protected Conversations

Improper conduct can undermine the confidentiality of both types of conversations. If improper conduct is found, the protection that typically applies may be lost.

Examples of Improper Conduct:
1. Bullying or Harassment: Applying undue pressure or making threats.
o Example: Threatening to dismiss an employee if they refuse to accept a settlement offer.
2. Fraud or Misrepresentation: Providing false or misleading information during discussions.
3. Victimisation: Penalising an employee for asserting their rights or raising concerns.
4. Discrimination: Making settlement offers conditional on discriminatory factors (e.g., age, gender, or disability).

What You Can and Can’t Do in These Conversations

What You Can Do:
• Prepare Thoroughly: Have a clear rationale for initiating the discussion.
• Remain Professional: Maintain a calm and respectful tone.
• Offer Fair Terms: Present reasonable settlement terms to encourage agreement.
• Document Clearly: Record offers and agreements in writing for clarity, under the correct heading e.g. Without Prejudice and Subject to Contract.

What You Can’t Do:
• Apply Undue Pressure: Forcing an employee to accept an offer by threatening dismissal.
• Discriminate: Base discussions or offers on protected characteristics.
• Act Dishonestly: Conceal relevant information or mislead the other party.
• Overstep Legal Boundaries: Use the conversation to cover up unlawful acts or breaches of statutory rights.

Final Thoughts

Both without prejudice and protected conversations can be valuable tools in resolving workplace disputes or facilitating termination agreements. However, it’s essential to understand their limitations and avoid improper conduct. Employers should approach these discussions carefully, ensuring they remain professional, lawful, and respectful throughout.