Following an amendment to the Enterprise and Regulatory Reform Bill, any discussions between an employer and an employee surrounding offers to terminate employment are to be inadmissible in unfair dismissal claims.
The aim of the new legislation is to ensure that offers of a settlement cannot be used against an employer in an unfair dismissal case. The new rule is, however, limited in application.
Firstly, employers will not be able to rely on the new legislation where their behaviour has been ‘improper’. The meaning of ‘improper’ is likely to be the subject of much debate. The rule has been criticised to some extent because whether or not the behaviour is improper if there is an allegation that it is, the offer will have to be disclosed to the Tribunal for them to make that judgement.
Secondly, it will not affect discrimination or breach of contract claims and does not apply in any of the automatic unfair dismissal situations, such as whistleblowing. As a consequence the application of the rule in relation to constructive dismissal will be interesting, as often it is pre-settlement discussions which lead an employee to claim constructive dismissal. As a claim of constructive dismissal comprises an element of both breach of contract and unfair dismissal, this may result in the protected conversation being taken into account in such a claim. Further the rule does not prevent claimants with multiple claims bringing in the conversation as evidence for their other claims so it is likely it will prejudice the unfair dismissal claim dealt with in the same proceedings.
The clause has therefore been criticised for not offering employers enough protection in preventing discussions about work issues from being used against them. It is however yet to be approved during the passage of the Bill through the House of Commons and in view of the criticisms above it is likely it will be subject to further amendment.