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In July 2013 a new provision, s111A, was inserted into the Employment Rights Act. This introduced the concept of “protected conversations” or “pre-termination negotiations” whereby any evidence about settlement discussions would be inadmissible in any subsequent claim for ordinary unfair dismissal unless the employer was guilty of “improper behaviour”. This was aimed at encouraging settlement and addressing the difficulty with common law “without prejudice” privilege which applies only once there is “a dispute” between the parties.
In Fairthorn Farrell Timms LLP v Bailey the EAT has given the first decision on the scope of s111A. Ms Bailey initiated settlement discussions following which there was correspondence between her solicitors (which were marked “without prejudice”) and her employer (which were not). Settlement was not reached and she brought a grievance followed by a tribunal claim for constructive dismissal and sex discrimination. She referred to the settlement discussions and the “without prejudice” correspondence in her grievance and her ET1. FTT did not object to this and in fact referred to the same material in its response. However, it subsequently raised the issue of admissibility at a preliminary hearing. The tribunal concluded that s111A only restricted details of the offer made from being disclosed and that it did not mean that details and documents were wholly inadmissible. The employer appealed.
The EAT made the following findings:
The case was remitted to the tribunal to decide whether there was improper behaviour and whether s111A was properly engaged in circumstances where the claimant was alleging that the employer was not genuinely negotiating to resolve the dispute.
This article was written by Emma Bartlett.