Just how confidential are ‘off the record’ conversations between an employer and an employee?
Section 111A of the Employment Rights Act 1996 introduced ‘pre-termination negotiations’ (‘PTN’), a concept which gives employers and employees more flexibility to discuss arrangements for termination in confidence that those discussions cannot be raised in subsequent legal proceedings. Prior to the introduction of PTN, the confidentiality of pre-termination discussions was covered by the concept of ‘without prejudice’, which prevents discussions relating to termination which have been made in the course of an existing dispute being raised before a court or tribunal. The purpose of section 111A was to extend the application of confidentiality covered by the ‘without prejudice’ principle to situations where there is no existing dispute between the employer and employee. The practical effect of this extension of confidentiality was uncertain until the EAT clarified its scope in the recent case of ‘Faithorn Farrell Timms LLP v Bailey’.
Mrs Bailey was employed by Faithorn Farrell Timms LLP (‘FFT’) as a part time office secretary for a number of years. Due to part-time working subsequently no longer being an option, she and her employer discussed termination of her employment by way of a settlement agreement. A dispute then ensued which saw Mrs Bailey resign from her position and subsequently claim constructive unfair dismissal and sex discrimination. In her claim, Mrs Bailey referred to the pre-termination discussions, which after initially also referring to such discussions in their response, FFT argued were inadmissible by virtue of section 111A.
Decision of the Employment Tribunal
The ET held that the termination discussions raised by Mrs Bailey were not wholly inadmissible, having interpreted that section 111A only applied to specific details of the discussions made and not their mere existence. Submitting that the ET’s interpretation of section 111A was too narrow, FFT appealed the decision to the EAT.
Decision of the Employment Appeal Tribunal
The EAT held that section 111A not only protects the details of termination discussions but also the fact that the discussions took place. It was held that this protection also extends to internal conversations between management and human resources departments, for example, given the likelihood that these departments would be involved in such discussions. Furthermore, the EAT held that protection under section 111A cannot be waived, in contrast to privilege under the ‘without prejudice’ principle.
This case has provided clarification that the detail of termination discussions, including the mere existence of such discussions, will be protected by section 111A (even in the absence of an existing dispute). Furthermore, the finding that the protection of section 111A extends throughout management and HR departments is good news for employers, particularly given the ease by which employees can obtain copies of internal correspondence via subject access requests. It is also important for employers to note that despite the extent of the protection offered by section 111A, it only applies to ordinary unfair dismissal claims (not those which are alleged to be automatically unfair or other claims such as discrimination). Parties in such circumstances would need to rely on the ‘without prejudice’ principle as an alternative form of protection, which as discussed above, is more limited in scope. Finally, although it is possible to seek to claim that such conversations are in fact admissible in the event of ‘improper behaviour’, much is likely to depend on the facts of a particular case. We would always advise seeking legal advice before seeking to rely on the ‘without prejudice’ principle or the protection under section 111A of the Employment Rights Act 1996.
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