Navigating employment termination discussions can be complex and fraught with potential legal pitfalls, particularly the fear of unfair dismissal claims if negotiations fail. Section 111A of the Employment Rights Act 1996 addresses this concern by providing a framework for protected conversations. Below, we delve into the specifics of this legal mechanism and answer frequently asked questions to help you understand its application.

If you have any questions or believe your rights have been breached regarding section 111A, contact us now. Settlement Agreement Lawyers are experts in the field and can provide specialist advice, following a quick chat.

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Section 111A of the Employment Rights Act 1996 – What is it?

Section 111A of the Employment Rights Act 1996 (ERA) was introduced to facilitate frank and open discussions between employers and employees regarding potential termination of employment. This mechanism ensures such conversations can occur without fear of being used as evidence in unfair dismissal claims. Commonly known as “protected conversations”, they allow both parties to negotiate exit terms off the record.

What Does Section 111A Mean?

Section 111A provides that protected conversations between an employer and an employee cannot be used as evidence in court. This is provided specific criteria are met for this protection to apply:

• The correspondence must involve an offer or negotiation aimed at terminating the employee’s employment on mutually agreed terms
• These conversations must take place before the employee’s dismissal
• The only potential claim arising from these discussions must be unfair dismissal
• “Improper behaviour” mustn’t be present during these conversations (details on what constitutes improper behaviour are discussed further below)

What is the Effect of Section 111A of the Employment Rights Act?

As mentioned, section 111A allows for protected conversations between employers and employees about the potential termination of employment. This provision was introduced to encourage both parties to engage in “pre-termination negotiations”.

The section achieves this by removing the risk of these conversations being used as evidence in unfair dismissal claims if the negotiations fail, except in cases of “improper behaviour”. Consequently, the fear of legal consequences is eliminated, enabling honest dialogue aimed at reaching a mutually agreeable solution.

Notably, distinct from the “without prejudice rule”, section 111A doesn’t require a pre-existing dispute for its protections to apply. 

What is Pre-Termination Negotiation?

“Pre-termination negotiation” describes discussions that occur before an employee leaves a company. In the context of section 111a, it refers to protected conversations aimed at settling the employee’s departure terms before they’re dismissed.

This process aims to facilitate a smooth and efficient resolution of termination issues. It typically addresses aspects like severance pay, notice periods, and other exit terms and allows an employee to depart without the need for formal dismissal procedures.

Key Characteristics of Pre-Termination Negotiation:

1. Objective: The primary goal is to reach mutually agreeable terms that facilitate an employee’s exit without formal dismissal procedures being required.
2. Timing: As the name suggests, such negotiations occur before termination.
3. Conditions: These negotiations are protected from being used as evidence in unfair dismissal claims, providing they satisfy the criteria outlined above.

When can Evidence of Pre-Termination Negotiation be Put in Front of an Employment Tribunal?

Pre-termination negotiations, as outlined in section 111A, generally remain confidential and cannot be referred to in unfair dismissal claims. However, there are specific circumstances where these negotiations can be put before an employment tribunal:

1. Application for Costs: If either party makes an application for costs, the offers made during pre-termination negotiations may become relevant. Here, the employment tribunal may consider the facts and content of these offers to determine whether costs should be awarded.
2. Claims Other Than Unfair Dismissal: Section 111A protections don’t apply to claims beyond unfair dismissal. If the claim involves discrimination, a breach of contract, or automatic unfair dismissal, among others, the negotiations can be disclosed.
3. Improper Behaviour: If improper behaviour occurs during negotiations, their contents may be presented to the tribunal. This is because improper behaviour nullifies the confidentiality of these discussions, allowing the tribunal to consider them in its deliberations.

It’s important to note that these circumstances override the protections provided unless the “without prejudice rule” covers the discussions.

What is Improper Behaviour?

Improper behaviour relating to section 111A refers to conduct during pre-termination negotiations deemed inappropriate or unacceptable. If improper behaviour exists, the tribunal may consider evidence of the talks if it believes it’s just to do so.

To determine whether such negotiations can be used as evidence, the employment tribunal must examine:

1. The Existence of Improper Behaviour: The tribunal must first identify whether anything said or done during negotiations constitutes improper behaviour.
2. The Just and Equitable Consideration: Once the presence of improper behaviour has been established, the tribunal must assess whether it’s just and equitable to admit the evidence of the negotiations. This involves weighing the fairness and relevance of including such evidence in the proceedings against any potential prejudice it may cause.

By scrutinising these factors, the tribunal ensures only relevant and fair evidence is considered in cases of alleged improper behaviour.

Examples of Improper Behaviour

The legislation’s language is wide, allowing tribunals to define “improper behaviour” on a case-by-case basis. However, some common examples that could lead a tribunal to admit evidence include, but are not limited to:

• Harassment, Bullying, and Intimidation: This includes the use of offensive language, aggressive behaviour, or any actions intended to demean or frighten the employee.
• Physical Assault or Threats: Any form of physical assault or threats of physical violence, as well as other criminal behaviours, fall under improper behaviour.
• Victimisation: Targeting an individual for unfair treatment or retaliation, especially after they’ve made a complaint or asserted their rights.
• Discrimination: Treating someone unfairly based on their protected characteristics.
• Undue Pressure: Examples include not providing the employee sufficient time to consider an offer or threatening dismissal if they don’t agree to the settlement terms.

These examples illustrate behaviours that compromise the fairness and integrity of pre-termination negotiations. Consequently, the discussions may be disclosed before an employment tribunal.

Employment Tribunal Cases Dealing with Section 111A

• Ms Stolk v Hunts Food Service Limited: Here, the tribunal upheld the claimant’s allegations of unfair dismissal and discrimination related to pregnancy and maternity.
• De Crespigny v Information Security Forum Ltd: This time, the tribunal decided that discussions about the future of a CEO’s employment were admissible in an unfair dismissal claim. This was because there wasn’t a settlement offer or negotiations aiming for termination via mutually agreeable terms.
• Mrs D Lingard v Leading Learners Multi Academy Trust: In this case, the tribunal ruled no inappropriate behaviour was present when the employee was provided only a four-day timeframe to accept a settlement offer.

Our Specialist Lawyers’ Views on Section 111A

We speak to Alex Hodson, senior associate and one of our employment law specialists for her views – 

“A protected discussion is a great way for the parties to have an open and frank discussion where they may feel that the working relationship has broken down and wish to part ways amicably.

For employees, it enables them to leave with a monetary sum to cover their finances until they find new employment (which can be the case sometimes). Plus it can offer a guaranteed clean reference and the knowledge that their reputation will not be negatively impacted by their employer (if this is a concern).

For employers, it allows the employer to discuss potential termination of the employment before any potential dispute arises. They can negotiate the terms of settlement to include non-derogatory and confidentiality clauses to maintain their reputation, avoid a long-winded dispute, and be in a safe position to find a replacement in the role.

Remember: Improper Behaviour Applies to Both Parties

It is crucial to remember that the examples of improper behaviour described above apply to both parties. As such, both parties need to be cautious as to how they conduct themselves during any protected conversations. If you’re trying to explain the reason to explore an exit package, it must not be done in a way that could be deemed as discriminatory, victimisation or threatening.

To tackle any concerns, it may be worth bringing an independent witness. They can sit in and take notes, or observe the discussions to ensure professionalism is maintained. A note of the discussion can be prepared, but as advised above, it cannot be used during normal tribunal proceedings, unless needed as evidence of improper behaviour or to calculate costs.

The terms of any exit package following a protected discussion must be agreed upon by both parties and included in a settlement agreement. Only then can it be seen as legally binding and bring a conclusion to the working relationship.”

We hope this guide has answered your questions about section 111a of the Employment Rights Act 1996. If you have any further queries or wish to discuss your case, contact Settlement Agreement Lawyers. As employment law specialists, we can provide the answers you seek and navigate you through the legal process if your case is eligible.

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