Summary and implications
The government is on a mission – to keep parties out of the employment tribunal system. Amongst the many new laws coming into force this summer are provisions that make exit negotiations non-disclosable in some subsequent tribunal proceedings. These provisions will supplement the existing protection of "without prejudice" (WP) discussions and overcome the limitation that confidentiality only covers WP discussions aimed at resolving "genuine disputes".
The rationale was that employers often wish to agree an exit in the absence of a "genuine dispute". The new laws aim to do just that – they apply to cases where the parties are not in a dispute. But they have major shortcomings, which could lull unaware employers into a false sense of security.
- Protection from disclosure is limited to "normal" unfair dismissal claims. This means information could still be revealed in other cases, e.g. discrimination, whistleblowing and contract claims.
- The ACAS Code (Code) supplementing the legislation requires the employee to have a 10-day cooling off period from the date he/she receives a formal written offer. Although the parties may agree a shorter period, this could amount to "improper behaviour" and invalidate confidentiality (see below).
- The Code suggests that, although employees have no statutory right to be accompanied at settlement discussions, employers should allow them to bring a colleague or a trade union member as a companion. This is something many employers will be reluctant to do.
- Discussions will be disclosable if there has been "improper behaviour" by either party. This concept includes "all forms" of harassment, bullying or victimisation, as well as placing "undue pressure" on a party during the discussions.
The many limitations of the new regime make it unattractive, and dangerously misleading, to employers. Arguably, it adds little to the existing WP protection and should only be used with care.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.