A recent Employment Appeal Tribunal (EAT) case has shed important light on how employers can properly handle “protected conversations” with employees, particularly in redundancy situations.
Mr Kevin Gallagher v McKinnon’s Auto and Tyres Ltd: [2024] EAT 174
Background
In Gallagher v McKinnon Auto and Tyres, a branch manager returning from sick leave was told his position was at risk of redundancy. During what was termed an “off-the-record” meeting, he was offered a settlement agreement and given 48 hours to respond. The employer indicated that if he didn’t accept, a redundancy process would follow. After turning down the offer, he was laid off and later filed a claim for unfair dismissal.
What are protected conversations?
The law relating to protected conversations also referred to as pre-termination negotiations, is set out in Section 111A of the Employment Rights Act 1996 and allows employers to have confidential discussions with employees about ending their employment by mutual agreement. These discussions cannot typically be used as evidence in ordinary unfair dismissal claims, providing employers follow the proper process.
The law aims to give businesses more flexibility in managing their workforce while protecting both parties’ interests. These conversations are supported by an ACAS Code of Practice, which provides important guidance on conducting them properly.
EAT decision
The employee challenged the protected status of these conversations, claiming improper behaviour because:
- He was surprised by what he thought would be a return-to-work meeting
- He was given only 48 hours to consider the offer.
- He was told redundancy would follow if he declined
However, the EAT upheld that these factors didn’t amount to improper behaviour. Importantly, they distinguished between redundancy and disciplinary situations. Whilst telling an employee “accept this or you’ll be dismissed” might be improper pressure in a disciplinary context, it’s different in genuine redundancy situations where the role is legitimately at risk.
What should I be doing as an employer?
When having protected conversations about redundancy:
- Clearly explain the truthful business reasons for the potential redundancy
- Allow employees sufficient time to consider settlement offers
- Do not present alternative outcomes as forgone conclusions
- Document your business case and keep records of all discussions
Comment
Protected conversations can be a valuable tool for managing workforce changes efficiently. However, they require careful handling to maintain their protected status in claims of unfair dismissal.
This decision provides helpful reassurance for employers using protected conversations in redundancy situations.
If you need advice on managing redundancies or conducting protected conversations, our Employment Law team can help ensure you follow the correct process.4
How can we help?
Rebecca Arnold is an Associate in our expert Employment Law team, providing advice on a wide range of contentious and non-contentious matters including unfair dismissal, unlawful deduction of wages, whistleblowing and discrimination claims.
For advice on or further information in relation to the subjects discussed in this article, please contact Rebecca or a member of our team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online form.
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