Protected Conversations: A practical guide for employers
Author
Rob Birley
Updated
Sometimes the employment relationship is beyond repair and you are faced with two choices; following a lengthy and difficult termination process, or finding a mutually beneficial way of moving on. This is where a protected conversation comes in.
A protected conversation is a legally permitted off-the-record conversation. In this article, we look at how a protected conversation can be used and what it protects the employer from. We also touch on the differences between a protected conversation, without prejudice and legal privilege, and when it may be best to use each approach. It is important to note that they are not the same. A protected conversation sits at the formal end of the conflict resolution in the workplace spectrum. If you are still weighing up your options earlier in that process, our practical guide sets out the full range of approaches available to you.
Please note: This article is intended as practical guidance for employers and HR professionals and does not constitute legal advice. Protected conversations involve specific legal risk, and getting the detail wrong can have real consequences. We strongly recommend taking independent legal advice before initiating one. Cornerstone works alongside a trusted HR legal partner and can refer you to specialist employment law support where it is needed. Get in touch to discuss your situation.
How protected conversations work
Section 111A of the Employment Rights Act 1996 sets out the framework for both protected conversations and without prejudice conversations. The protected conversation is described as a pre-termination discussion. What it is not is a panacea for all ills. If you have decided that an employee is not the right fit the company and you go straight to a protected conversation without having followed any formal process, you run the risk of it backfiring on you.
Take an example of an employee who is underperforming. Aside from some general conversations about the need to improve, you have not followed your performance process. You bring the employee into a room and tell them you are going to have a protected conversation. In that meeting you talk about how it is not working out and that you would like to explore whether the employee would be willing to leave the company in return for an agreed settlement. Before entering that conversation, there are two things worth preparing for:
- What is a realistic offer going to look like?
- What are we going to do if we cannot reach agreement?
The general rule is the less work you have done before the meeting takes place, the more expensive it is going to be to reach an agreement. In practice, if you have not started any formal process (whether that be performance, absence, discipline etc), you will have to be prepared to pay a lot of money to encourage the person to agree to a settlement.
Equally, if you have not started a process, why should the employee want to agree to a settlement? And if they do not agree and you have not got an alternative course of action that seems unpalatable, are you at risk of making things worse?
It is therefore our view that protected conversations should not be seen as a quick fix. It is almost always preferable to at least have started a formal process before entering a protected conversation.
What to say and what not to say
How you open a protected conversation matters as much as the decision to have one. The ACAS Code of Practice recommends that employers set out the reasons for the discussion, explain that it is being conducted under section 111A, and make clear that the employee is under no obligation to agree to anything.
A simple and appropriate opening might be: "I would like to have a conversation with you today on a confidential basis under section 111A of the Employment Rights Act. That means what we discuss today cannot be used in an unfair dismissal claim, as long as we both conduct ourselves properly. I want to explore whether there is a mutually agreeable way for us to part ways. You are under no obligation to agree to anything, and I would encourage you to take independent legal advice before making any decision."
What you should avoid saying is equally important. Do not suggest (implicitly or explicitly) that the employee will be dismissed if they do not agree. Do not make remarks that could be construed as relating to a protected characteristic. Do not apply pressure on the day for an immediate response. And do not put anything speculative or emotive in writing beforehand. Emails that read as though the decision has already been made will not help your position if the conversation is later challenged.
If the conversation moves into territory you were not expecting, for example, the employee raises a discrimination concern or mentions whistleblowing, pause the meeting, take advice, and do not continue under the assumption that section 111A still applies.
What does a protected conversation protect you from?
A standard protected conversation will only cover you in cases of ordinary unfair dismissal, e.g. not automatic unfair dismissal. If you have issues of potential discrimination, any discussions had under the protected conversation rules will be disclosable.
Can an employee refuse a protected conversation?
Yes. An employee cannot be forced to participate in a protected conversation or to accept any offer made during one. They are entitled to decline the meeting entirely, or to attend and simply reject the settlement proposal.
If an employee refuses to engage, the employer cannot proceed as though the conversation took place or use the refusal as grounds for any adverse action. The appropriate course is to revert to the relevant formal process, whether that is a performance improvement plan, a disciplinary procedure, a redundancy exercise, or another process that fits the circumstances. A protected conversation is not a substitute for those processes, and attempting to use it as one creates more risk, not less.
Employees are also entitled to be accompanied by a trade union representative or a colleague at any such meeting if they wish, and should be given at least 10 calendar days to consider any written offer and take independent legal advice before responding. Refusing a settlement offer does not put an employee at a disadvantage in any subsequent formal process. An employer who then conducts a fair and documented process will reach a fair outcome regardless of whether a protected conversation was attempted first.
Without prejudice: How it differs from a protected conversation
Without prejudice conversations only hold confidentiality when there is a dispute. Now what constitutes a dispute? Case law suggests that the employee raising a grievance is not enough to call it a dispute, there needs to be talk of litigation to solve the issue. Take an example where the threat of litigation occurs part way through a conversation. What should an employer do then? If the dispute is not in place at the start of a conversation but part way through the tone changes and litigation is mentioned, the meeting should be paused and it made clear that all further discussions are without prejudice. What is important to note here is that the conversation before the pause would be disclosable.
The other consideration here is that without prejudice meetings must be held with a genuine willingness to end the dispute and that settlement cannot be token in element. So there needs to be compensation for loss of office attached to the offer, just paying up statutory entitlements such as notice and holiday pay is insufficient.
Without prejudice proceedings cover a wider range of claims than just ordinary unfair dismissal but they are no carte blanche. Section 111A talks about areas of improper behaviour not being covered. This includes:
- Harassment, bullying and intimidation through offensive words and aggressive behaviour
- Physical assault (actual or threatened) and other criminal behaviour
- Victimisation
- Discrimination
- Putting undue pressure on a party, including threatening dismissal if they do not agree to settle, or making any offer conditional on immediate acceptance
On timing: ACAS recommends a minimum of 10 calendar days for an employee to consider a written offer and obtain independent legal advice before responding. Giving less time than this — unless the employee themselves agrees otherwise — is likely to be treated as undue pressure.
The consequences of improper behaviour are serious and worth understanding clearly. If a tribunal finds that improper behaviour occurred during a protected conversation, the protection under section 111A falls away, entirely or in part. That means the conversation, which you believed was off the record, can become admissible as evidence in an unfair dismissal claim. A poorly managed meeting that was intended to resolve a difficult situation can therefore become the very evidence that undermines your defence. This is not a hypothetical risk. Employers have faced this outcome where undue pressure was applied, where a discriminatory remark was made in passing, or where an employee was not given adequate time to consider the offer. The practical rule is straightforward: following the ACAS Code of Practice on Settlement Agreements is not just good practice, it is what keeps the conversation protected.
When agreement is reached: settlement options
If an offer is made that is acceptable to the employee, there are two ways of closing off the protected conversation or without prejudice meeting. The first way is to involve ACAS and sign a COT3 agreement. This is free to enter into and is legally binding on both parties but as ACAS are under significant pressure at the moment, this may take time.
The other alternative is to sign a settlement agreement. This must be legally reviewed and therefore does incur a cost for employers. Once the agreement is signed by both parties, it is legally binding, as long as there has been no improper behaviour in the negotiation process.
When agreement is not reached
Again, providing there is no improper behaviour, then the protected conversation/without prejudice conversations are non-disclosable. How you normalise working relationships after this process has been undertaken is an entirely different matter.
Legal advice privilege
Advice obtained can be disclosable unless you involve a solicitor, lawyer, legal executive or in-house counsel. It must also be related to the dispute at hand to obtain privilege rights. You cannot use a HR Consultant for legal privilege protection. The advice must also have the main purpose of gaining information about or providing advice about the issue at hand.
Litigation privilege
Unlike legal privilege, litigation privilege can include advice from non-legal sources such as HR Consultants. To be valid, the litigation or arbitration must be either more than just a potential risk or actually underway. Like the above, the same rules apply about the main purpose of gaining information or providing advice.
Ready to navigate a protected conversation?
When contemplating a protected conversation or without prejudice conversation, it is easy to overshare on email or WhatsApp. Remember that these conversations, unless covered by legal or litigation privilege, are disclosable. Therefore, be careful not to write things like ‘I just want [name] gone’ unless you plan to have it read back to you in an employment tribunal.
Struggling with employee relations?
If you have issues with members of your team, early involvement is usually more effective. We can help you coach or mediate your way out of a formal situation. However, if it has already reached a threshold of a protected conversation, we can help you navigate the process.
Frequently asked questions
A protected conversation is an off-the-record discussion between an employer and employee about ending employment on agreed terms, usually through a settlement agreement. It is governed by section 111A of the Employment Rights Act 1996, which means that — providing both parties behave properly — what is discussed cannot be used as evidence in an ordinary unfair dismissal claim.
A protected conversation is most appropriate where the employment relationship is no longer working and both parties may benefit from an agreed exit. It works best where at least some formal process has already begun whether performance management, absence management or disciplinary proceedings. Using a protected conversation as a shortcut to avoid those processes entirely is likely to weaken your position and may result in a more expensive settlement.
The protection under section 111A applies to ordinary unfair dismissal claims only. It does not cover automatically unfair dismissal, discrimination, whistleblowing or harassment claims. If any of those issues arise during the conversation, even in passing, the protection may not apply to those elements of the discussion.
Yes. An employee cannot be forced to participate in a protected conversation or to accept any offer made during one. They are entitled to decline the meeting entirely or to attend and reject the settlement proposal. If they refuse to engage, the appropriate course for the employer is to revert to the relevant formal process rather than applying further pressure.
A protected conversation can take place even where no employment dispute currently exists; that is its key advantage over without prejudice. Without prejudice conversations only hold confidentiality where a dispute is already live, and case law sets a high bar for what counts as a dispute. Without prejudice proceedings also cover a wider range of claims, which can make them more appropriate in some circumstances. The two are not interchangeable, and it is worth being clear which framework you are operating under before the conversation begins.
The ACAS Code of Practice on Settlement Agreements provides a non-exhaustive list. It includes harassment, bullying and intimidation, physical assault or threats of it, victimisation, discrimination, and putting undue pressure on a party. Undue pressure includes threatening the employee with dismissal if they do not agree to settle, or failing to give them sufficient time to consider a written offer ACAS recommends a minimum of 10 calendar days.
If a tribunal finds that improper behaviour occurred, the protection under section 111A can fall away either entirely or in part. That means the conversation you believed was off the record may become admissible as evidence in an unfair dismissal claim. A meeting intended to resolve a difficult situation can become the very evidence that undermines your defence. Following the ACAS Code of Practice is what keeps the conversation protected.
You should identify that the conversation is being held under section 111A, explain the reason for the discussion, and make clear that the employee is under no obligation to agree to anything. Avoid any suggestion, implicit or explicit, that the employee will be dismissed if they decline. Do not make remarks connected to a protected characteristic, and do not pressure the employee for an immediate response. If the conversation moves into unexpected territory, such as a discrimination concern being raised, pause the meeting and take advice before continuing.
A COT3 is a legally binding settlement agreement facilitated by ACAS through the early conciliation process. It is free to use and does not require the employee to obtain independent legal advice for it to be binding. Unlike a settlement agreement, a COT3 can only be used where ACAS has been involved in the process. It is typically shorter and simpler than a formal settlement agreement but draws a line under the same claims.
Both bring the matter to a legally binding close, but they differ in process and scope. A COT3 is facilitated by ACAS, is free, and does not require the employee to take independent legal advice. A settlement agreement is negotiated directly between the parties, must be reviewed by an independent legal adviser acting for the employee, and incurs a legal cost, typically met in part by the employer as part of the settlement. A settlement agreement can also cover a broader range of potential claims and is often more appropriate for complex or high-value exits.
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