Keep calm and carry on — pre-termination negotiations and settlement agreements in force from 29 July 2013

This confidentiality protection is lost where there is ‘improper behaviour’ including ‘undue pressure’. Litigation is almost inevitable over where the line is to be drawn between ‘improper behaviour’ and sub-optimal practice. However, not allowing the employee a reasonable time (the ACAS code recommends a minimum of 10 days) to consider the formal offer or suggesting that, if the offer is not accepted, dismissal will be an inevitable outcome, is likely to constitute undue pressure and therefore improper behaviour. As is often the case in employment law, reasonableness is the watchword — so, where appropriate, factually stating that disciplinary action may be an alternative if a settlement agreement cannot be reached is not likely to constitute improper behaviour or undue pressure. 

It is important to be aware that pre-termination negotiations and settlement offers will be inadmissible as evidence only in ordinary unfair dismissal cases (in other words, not in breach of contract, discrimination claims or claims for automatic unfair dismissal such as dismissals due to being a part-time/fixed-term employee, making a protected disclosure or asserting a statutory right). It can often take only a little creative thinking to frame what appears to be an ordinary unfair dismissal claim as an automatically unfair dismissal claim or a discrimination claim, so employers should be live to this. 

There is also a question mark over whether, in certain circumstances, pre-termination discussions could entitle an employee to argue that there has been a fundamental breach of contract entitling them to claim constructive dismissal — an attractive argument, perhaps, for a highly-paid executive wishing to escape a long notice period and post-termination restrictions…

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