Keeping it Confidential ‘Changes to the Employment Rights Act’

An amendment to the Employment Rights Act introduced on 29^th July 2013 allows employers and employees to keep certain negotiations regarding termination of employment confidential.

This means, subject to certain rules and exceptions any negotiations and offers cannot be used as evidence in subsequent unfair dismissal claims. Previously, such negotiations and offers could have been protected by making them “without prejudice” but this only applied where there was an existing dispute and their status could be challenged.

The new rules allow such negotiations to remain confidential even where there is no existing dispute. This may be useful where an employer is seeking to address issues of performance or misconduct rather than a dispute. The hope is that this new confidentiality provision will encourage the parties to enter into settlement agreements rather than to resort to employment tribunal proceedings.

There are important exceptions which will mean that the confidentiality provisions will not apply. The most important exception is that the provisions will only apply in cases of unfair dismissal and not in cases involving discrimination or breach of contract. In addition, the Employment Tribunal may set aside the confidentiality if either party has behaved improperly although what amounts to improper conduct is for the tribunal to decide.  ACAS (Advisory, Conciliation and Arbitration Service) has issued guidance which indicates that this may include fraud, blackmail, intimidation or putting the other party under undue pressure. Examples of undue pressure include not giving the other party a reasonable time to consider the offer (a minimum of 10 calendar days is suggested) or indicating that the dismissal will be inevitable if the offer is not accepted.

ACAS has also set out guidance on how an offer should be made. For example, it should be conducted in a neutral manner outlining the likely alternatives if the offer is not accepted. In addition, the other party should be given a minimum of 10 calendar days to allow for consideration of the offer.

Although these new rules are to be welcomed they must be used with caution if the protection is to be retained and claims avoided. They will not assist in issues of discrimination or any other dismissal  deemed automatically unfair such as whistleblowing or trade union membership. How the tribunals will interpret the improper behaviour provisions remains unclear.

John Carter specialises in employment law matters.  Please contact him if you have any questions on the application of the new rules in practice.

This article appeared in Luton News Business Monthly and Hemel Today Business Eye.