A very happy Tuesday to you all. Philip Pearson-Batt here with Precept’s latest blog update.
We haven’t spoken in a while, have we? Are you doing ok?
Even though it is very much a distant memory now, I realise I haven’t updated you on my trip to Austria. It’s been a bit non-stop since we got back.
The long and short of it, is that it was a really wonderful trip. We completely lucked out with the weather (brilliant sunshine, not too cold, peak autumnal weather) and had some excellent food and Austrian wine whilst out there.
We had a great time exploring the backstreets of Salzburg, heading out to a village in the “lake district” and singing along to Do-Re-Mi on our Sound of Music tour (at least, I enjoyed that. Paul, not so much).
We then headed over to Vienna for a couple of days and managed to time things just right, because two Christmas markets opened on our last day. One, at a big Schloss just outside of the city, was very special. It was the first day of the market, so not too busy, and we got to watch them light the Christmas tree just as the sun had set. I got a little bit over-excited. I was a kid at Christmas.
We’ve now booked a day’s holiday on 6th December for two reasons: to go and see the Wicked movie (yep, I’m that person) and also to book our next trip – Japan here we come (in September 2025)! As always, any recommendations are most welcome.
If you want to have a conversation about my travels, that is fine and I always invite them. It doesn’t need to be a protected conversation, we can speak freely!
But what if you did want to have a protected conversation? Is there anything I can do to assist with that? (Did you like my segue there? Did you know that this is how you spell segue, it’s not segway? I didn’t!)
Protected conversations are something that we deal with at Precept a lot. Remember that, generally, they are a way for employers and employees to enter into settlement negotiations. There doesn’t need to be an existing dispute to have the protected conversation. As long as they are handled appropriately and without undue influence, they will still be protected and the parties won’t be able to refer to them in any future claim for unfair dismissal (they don’t apply to other claims like discrimination, so don’t forget that!)
There are some frequently asked questions that are put to us when advising on these conversations and, actually, a recent Employment Appeal Tribunal (EAT) case helpfully provides some guidance on how those FAQs should be answered.
The case is Gallagher v McKinnon’s Auto and Tyres Ltd. In the Gallagher case, the Claimant brought a claim for unfair dismissal after they were made redundant. They tried to rely on a conversation that had taken place before they were dismissed (which was followed up in correspondence) during which the Respondent had offered the Claimant an enhanced redundancy package to leave on agreed terms.
The Claimant tried to argue (at Tribunal and at the Appeal Tribunal) that the Respondent had acted improperly during the conversation and that this meant the conversation could not be protected. The reason the Claimant said the Respondent had acted improperly was because he said they had placed him under undue pressure by doing the following:
- Inviting the Claimant to a return to work meeting, knowing full well that they were going to use the meeting to offer settlement;
- Saying that if the Claimant did not accept the settlement offer, a redundancy process would begin;
- Giving the Claimant a 48-hour deadline for acceptance.
These are all fairly standard tactics when employers have a protected conversation. It’s only the last one that makes me go a bit squirmy and say “hmmm”. But, again the EAT have given us all a helping hand because they’ve given a very clear indication that none of the above actions amounted to undue pressure.
In particular, the EAT held that:
- It may have been unfair that the Respondent raised the possibility of settlement unexpectedly at a return to work meeting, but that didn’t necessarily mean the Respondent had lied or that they had acted improperly;
- Telling the Claimant that a redundancy process would begin if he failed to accept the settlement offer was not the same as telling him he would be dismissed. The reason for this is that there are a number of different outcomes in a redundancy process. The employee might be redeployed into a suitable alternative role, for example.
- The 48 hour deadline to accept the Respondent’s settlement offer did not amount to undue pressure. Importantly, the Respondent had been clear that if this verbal offer been accepted, a written settlement would have followed this and he would then have had the 10 day minimum period to consider this written offer. The EAT did note that another judge might have come to a different decision, but they didn’t think it was “perverse” to draw a distinction between “formal written offers” to which the 10 day period would be relevant, and the verbal offer made to the claimant.
- In deciding whether there has been improper behaviour, the Tribunal should take into account all of the circumstances of the case. So, in this case, factors such as the calm manner in which the meeting was conducted, that the Claimant was given a breakdown of how the settlement figure had been reached fairly quickly, and that he had time to discuss the offer with his family, were all relevant to deciding that there had not been improper behaviour.
So, this case is really helpful. We’ve had disputes about this in the past and I’ve always erred on the side of caution (and, in some ways, I do still prefer to do that) but let me give you some practical tips here:
- Alerting an employee to the fact you want to have a protected conversation is going to make things much harder in the long-run. I would always suggest not tipping them off to the fact a settlement offer is going to be put to them at any meeting.
- Telling an employee they will be dismissed if a settlement offer is not accepted would absolutely amount to undue influence and so we’ve got to be careful how we phrase protected conversations – I would always advise using language like “might” and “could” rather than “will”.
- By all means, set a shorter deadline than 10 calendar days for an initial acceptance of an offer but make expressly clear that a formal offer and full draft settlement agreement will be provided after acceptance and that the employee will then have 10 calendar days to consider that settlement offer. The only thing to factor in there is that this might slow things down a little bit. If you want to get things wrapped up as quickly as possible then have the settlement agreement ready to hand over at the meeting and set the 10 calendar day clock running from the date of the meeting.
If you’re in doubt about how best to approach a settlement conversation, then your first port of call should always be Precept. As I say, this is sort of our bread and butter, so give us a shout and we can assist.
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