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Employment Law

Legal guidance - compliance - software

22 NOV 2011

Protected Conversations

Sean Jones

The Governing Coalition is presently proposing to introduce the concept of a "protected conversation" into employment law. The following is taken from a speech given by David Cameron on 10 November 2011:

But if employers are so concerned about the prospect of being taken to tribunal that they don't feel they can have frank conversations with their employees many companies just won't feel able to create those jobs in the first place. ... That's why I want to deregulate and cut back on bureaucracy. Not simply to help business but to create fair, simple processes that are good for business and good for employees too. So we will be consulting on the introduction of protected conversations, so a boss and an employee feel able to sit down together and have a frank conversation - at either's request."

The proposal is favoured by Nick Clegg who has said that protected conversations would allow employers and employees:

"to treat each other like human beings and not like potential litigants"

He echoed the suggestion that the employers felt the need for such a measure:

"Employers tell us they're afraid to have frank discussions with staff... or fear of those exchanges being used against them unfairly, should a dispute end up at tribunal."

Whilst the CBI has expressed enthusiasm, it is worth noting that this does not seem to be something that organisations representing employees are calling for. For that reason, I am going to concentrate in this post on whether the proposals make sense from an employer's point of view.

What is a Protected Conversation?

We presently know very little about what the Government has in mind beyond the essential idea that employers should, in certain circumstances, be able to say what they like to employees without having their words quoted back at them in tribunal proceedings. For a lawyer, the immediate analogue is a "without prejudice" (or "WP") discussion. Where two parties to a legal dispute wish to negotiate with a view to compromise they can do so on a WP basis. They can be as "frank" as they wish in the knowledge that, subject to some narrowly drawn exceptions, the court will not be told about what they have said. The "protected conversation" seems to be an attempt to extent the WP principle into the heart of the employment relationship, covering situations where there is no legal dispute to resolve. Of course, since the policy that underpins WP privilege is the public interest in resolving legal disputes without recourse to the courts, extending the principle to cases where there is no legal dispute to be resolved means that a different policy justification is required.

What is the policy justification? It has yet to be precisely articulated, but David Cameron's speech suggests that it is something along the following lines: Tribunal cases are an expensive inconvenience and a disincentive to job creation. I do not propose to deal with whether that premise is correct. I want to concentrate instead on more practical issues.

When would an employer want to have a "protected conversation"?

The example most frequently cited has been a situation in which an employer has concerns about an employee's performance. The employer, it is proposed, will invite the employee to a meeting, express dissatisfaction with a great frankness and send them off to improve. It is difficult to understand why an employer would want to have that conversation on a "protected" basis. A protected conversation would only make sense if employers were regularly getting into trouble by being too frank with employees about performance concerns. In fact, the opposite is true. Where an employer relies on poor performance as the reason for termination, the most likely ground of unfairness is a failure to warn the employee early enough and explicitly enough that they are under-performing and that their job is at risk. The protected conversation makes that problem worse because the employer would not be allowed to tell the tribunal about the warning that they had given the employee. In performance cases, the more open an employer is the better.

One situation in which having a conversation on a protected basis would make sense is where the message the employer wants to communicate is not "you need to improve or you'll be sacked" but rather "we've decided to sack you. Do you want to go quietly or do I have to push you through a performance procedure?" That sort of conversation frequently does get employers into trouble with the Tribunal. Speaking personally, my problem with giving that kind of conversation protected staus is that I think employers should get into trouble. There is no good policy reason for allowing employers to conceal the fact that their procedures are a sham.

How effective would the protection be?

Here is a bit of advice I give the Government for free: Attempts to exclude things from the Tribunal's jurisdiction will result in more hearings. It is a phenomenon known to gleeful lawyers as "satellite litigation". Employers who thought that they were protected from the costs of tribunal proceedings will find that they have to spend time and money trying to persuade the tribunal that they can rely on the protection.

Although the proposals need fleshing out, it is fantastically unlikely that an employer will be able to rely on merely invoking the "protected conversation" process to keep the Tribunal's nose out of what was said. It is unlikely, for instance, that the employer will be entitled to rely on the cloak of secrecy to do any of the following:

(1) Conceal an act of discrimination; (2) Conceal an act of bullying or harassment; or (3) Prevent the employee from relying upon a protected disclosure made during the course of the conversation.

On the first point, one of the specific situations in which Nick Clegg appears to have thought a protected conversation might be useful is where an employer wants to talk about retirement. That suggests that he may have in mind protecting employers against age discrimination claims. If he does, he is likely to be disabused rapidly. The anti-discrimination measures are under-pinned by European legislation which requires that there should be an effective remedy for acts of discrimination. It is unlikely that the UK courts and tribunals are going to conclude that an employer will be free to discriminate provided he does so having uttered the magic words "this is a protected conversation".

Other matters that will need to be settled

Beyond the cases identified above, there is a whole range of other difficult practical questions including the following:

(1) Can an employee refuse to have a protected conversation? (2) Is there any limit to the number of conversations that an employer can require? (3) Will an employee be entitled to be accompanied at a protected conversation meeting? (4) Will the mere invocation of the process be enough or will an employer have to show that the conversation meets qualifying criteria? (5) Will the employee be precluded from relying on an employer's behaviour to found a constructive dismissal claim even where it is clear that the conversation resulted in a breakdown of trust and confidence? (6) Can an employer convert a conversation into a "protected" conversation as it is happening? (7) Can an employer convert a conversation from a "protected" conversation as it is happening?

The Government will no doubt say these issues will be thrashed out in consultation. However, it is worth taking a step back and asking whether a measure that poses so many practical difficulties is worth pursuing when the benefits it can deliver are so uncertain.

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