Cas's Blog - It’s completely confidential!

Sooner or later, every HR professional face this. I give you the employee who’s made numerous grievances, the subjects of which could be actionable (once you separate out the ones, they have complained about ten times before and that rather bizarre one about the length of the CFO’s trousers).  The management team is fed up to the back teeth with wasting valuable business time managing the investigations and hearings and wants an end to it.  Or there is that key manager who is just not performing in their role but there is neither the time nor the appetite to performance manage them.  Recognise either of these scenarios?  If you recognise the complaint about the CFO’s trousers, please do let me know how it panned out…

When it’s clear that the situation calls for an ‘off the record’ discussion, what does that actually mean and how can we go about making sure that the discussion can’t get pulled into evidence and used against us at tribunal as strong indication of any real or perceived unfairness towards the employee?

Without going into detail, let me just rewind a little.  There are two types of ‘off the record conversations’, and to be crystal clear we should always refer to their proper names - ‘without prejudice discussions’, and ‘confidential negotiations’. 

Without prejudice discussions are governed by the common law (nothing in statute to see here, it’s a body of legal precedent built up over the years).  For without prejudice discussions to retain their confidentiality there has to be a dispute between the parties. What is, and isn’t, a dispute has been frequently tested at tribunal and in a nutshell, if the parties might reasonably contemplate litigation if agreement is not reached, then the without prejudice rule may apply.

Without prejudice discussions can result in a settlement agreement or COT3 which are capable of preventing the employee from bringing most employment claims, and of course can cover breach of contract claims as well.

Confidential negotiations are a statutory mechanism (take a look at S111A ERA) introduced by Messrs Cameron and Clegg in their coalition years, with the primary purpose of enabling employers to dismiss poor performers and poor behavers etc., fairly without the need for a protracted procedure.

The great thing about confidential negotiations is there doesn’t have to be a dispute between the parties. The downside is that they can only be used to settle ‘ordinary’ unfair dismissal claims. 

So, you might have a confidential negotiation with your employee; agree a settlement figure; sign a settlement agreement preventing them from bringing an ordinary unfair dismissal claim, only to receive notification from Acas that the employee has complained that you have subjected them to, let’s say, unlawful sex discrimination.

The Acas Settlement Agreements guide is comprehensive but it’s ‘Model Settlement Agreement’ doesn’t, in my opinion, make a clear enough distinction between a ‘full claims’ and a ‘S111A agreement’, which is why, in most situations where there is no dispute between the parties and a settlement reached under S111A ERA, employers offer up an all claims settlement agreement.  Technically, this is the wrong agreement, but once signed it’s a contract, and therefore enforceable.  This was clearly not the intention of the law makers, and has risk attached as it’s possible that the employee could assert that the mere presence of a list of discrimination claims to settle on the agreement is evidence that the employer has discriminated against the employee.

But supposing the employee doesn’t want to have a discussion about settlement, let alone enter into a settlement agreement?  Well, that’s their prerogative, and merely continuing with your plan and having the ‘without prejudice’ or confidential negotiations with them (whether they like it or not) is very likely going to end with the employee using that as evidence that you have treated them, or intend to treat them, unfairly/unlawfully. Because, guess what?  They have to agree to have the discussion with you for it to be inadmissible.

And if you think that this would never happen…well, I could tell you a tale or two that would make your toes curl - but my lips are sealed. It’s completely confidential!