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Are you using settlement discussions to exit poor performers?

Use this checklist to make sure you get it right...

Settlement discussions (also known as "protected conversations") enable schools and colleges to have confidential discussions with an employee about exiting them without the risk of the conversation being used against you in any subsequent unfair dismissal claim provided certain steps are taken.

1: Decide who can initiate a settlement discussion and whether they need to consult with the head, or with HR before doing so

This should be limited to senior managers/head teachers or designated governors.

2: Make sure that authorised individuals are properly trained and understand how to "safely" have a settlement discussion

It is helpful to have a policy which should set out the circumstances in which it is never appropriate to have a "settlement discussion". 

Remember that settlement discussions are not protected if the employee has raised issues about discrimination, harassment or victimisation, or where they could bring a claim for automatically unfair dismissal (because they have asserted a statutory right, 'blown the whistle' etc), or believes that the school/college has breached the terms of their contract of employment. 

3: Decide whether a settlement discussion is the best way to deal with the situation 

Consider the implications for the employment relationship if an agreement cannot be reached. What message are you sending out? Will this have other implications for the remaining staff?

4: Obtain all relevant information about the employee

  • What are the background issues? Are you absolutely confident that there is no unlawful discrimination, victimisation or other issue that will mean the discussion cannot be protected?
  • Is there a risk that the employee will accuse the school/college of discrimination if you attempt to use a settlement discussion to get rid of them e.g. "you're only dealing with me in this way because I am black/gay/disabled/old,etc."
  • Has the employee been disciplined for similar conduct? How long ago? What has happened since then?
  • Have you already started an informal or formal performance procedure? Why do you think it is not working?

5: Avoid having a settlement conversation "out of the blue"

There must be a clear basis for making the approach.

If the employee has no hint that their behaviour or conduct is unacceptable, they are likely to be defensive and you are unlikely to achieve an agreed settlement.

6: Ask the employee to attend a meeting to discuss his/her behaviour or performance on a mutually convenient date

Don't ambush the employee. Give them advance warning of the meeting and explain that it is voluntary and will be a "settlement discussion". Briefly explain what this means i.e. that the discussion will be "without prejudice" or "off the record" and will be inadmissible in legal proceedings. Explain that you hope that this will enable you and the employee to have a frank discussion about the issue/s. It is helpful (but not essential at this stage) to put this in writing.

7: Decide whether you will allow the employee to be accompanied at the meeting

ACAS recommend that employers should allow employees to be accompanied at the meeting by a trade union official, representative or a work colleague, but you are not obliged to do so. 

8: Prepare carefully for the meeting

  • Have a note taker present to make a record of the conversation
  • At the start remind the employee of the purpose of the meeting and that any discussions will be inadmissible in legal proceedings (which you hope will not be necessary in any event)
  • Explain to the employee that they must keep the discussion confidential
  • Be careful about the language you use and the impression it may give to the employee

    Do not:
  • Threaten the employee e.g. "take the offer or else you will be sacked."
  • Appear aggressive, impatient or condescending e.g. "I've only got 10 minutes to discuss this with you" etc. (You may need to hold more than one meeting before you  reach an agreement or decide that you are not able to do so).
  • Tell the employee that they have to make up their mind quickly or the offer will be withdrawn, (employees should be given no less than 10 calendar days to consider a written offer).
  • Put the employee on "gardening leave" to consider the offer. 

Remember, if you put pressure on the employee, the conversation will lose its protected status and can be referred to in any subsequent proceedings the employee may bring against you.

9: Negotiate sensibly

Decide in advance what financial offer should be made and the maximum that you are prepared to pay.

There are various factors to consider:

  • The employee's length of service. Remember all new employees need two years' service to bring a claim of ordinary unfair dismissal. If your employee cannot bring a claim for unfair dismissal you may be able to short-cut the 'normal' process anyway without needing to have a protected conversation. You may however need to check to see if an employee who had been working for a local authority has their continuity of employment preserved despite moving schools or moving to an academy
  • How long will it take before you will be in a position to fairly dismiss the employee or resolve the problem?
  • The employee's notice period and any other contractual entitlements, including any untaken annual leave
  • Previous settlement figures
  • How long it might take the employee to find another job
  • The possible liabilities and costs involved in dealing with any potential tribunal or court claim if the issue is not settled.

10: Will you provide a reference?

What will it say? Remember that any reference that you write must be true, accurate and fair.

11: Prepare a settlement agreement or letter in advance

You can give this to the employee if the meeting progresses well.

12: Listen to what the employee has to say

You should be prepared to negotiate with the employee or their representative within the reasonable limits you have set. 

13: Comply with the statutory provisions regulating settlement discussions and agreements

  • Put the offer in writing (by way of a settlement agreement).
  • Give the employee time to consider the offer (The ACAS Code recommends that the employee should be given at least 10 days to consider the agreement and that time only starts to run from the date the employee is given the settlement agreement).
  • Allow the employee to take independent legal advice and be prepared to pay a reasonable sum for this if an agreement can be reached

Remember, if an agreement cannot be reached, you will need to continue or start your internal processes to deal with the issue. The employee may well refer to the settlement discussion during other internal processes, such as disciplinary or grievance proceedings. If this happens you will need to remind the employee that the discussion is inadmissible and that you will redact any reference to it in any written documentation.

Legal support for the education sector | Our education team

Key Contact

Jenny Arrowsmith