Protected conversations: why the process matters as much as the words used

The EAT's decision in Mr L Tarbuc v Martello Piling Limited reminds employers that protecting a conversation requires more than choosing the right words. Employers must handle the entire process carefully if they want the discussion to remain off the record in any subsequent ordinary unfair dismissal claim. 

What is section 111A?

Section 111A of the Employment Rights Act 1996 allows employers to hold confidential discussions with an employee to agree the terms of an exit, even where no dispute exists. 

If those discussions do not result in an agreement, neither party can rely on them in any subsequent ordinary unfair dismissal claim, provided there has been no improper behaviour. 

The protection is therefore limited. Conversations held under section 111A may still be admissible in other types of employment claims.  

Background

Mr Tarbuc worked as an Estimating Engineer until his dismissal. Before his employment ended, the company's managing director met with him to discuss an exit proposal, which the company said was protected under section 111A.

Mr Tarbuc alleged that, during the conversation, the managing director said: 

“You don't have to accept this offer, but if you don't, I will put all the estimators in the redundancy process and I guarantee you will come last.”

Mr Tarbuc rejected the offer and was later dismissed. The company maintained the dismissal resulted from a genuine redundancy situation, but he disputed that explanation. 

He brought claims for unfair dismissal, unlawful deductions of pay, and less favourable treatment as a part-time worker. 

Did the tribunal find that the conversation was protected?

At a preliminary hearing, the tribunal considered whether the discussion was protected by section 111A and therefore inadmissible in evidence.

The company argued there was no improper behaviour. Mr Tarbuc argued that the protection should not apply because he had effectively been threatened with redundancy if he did not accept the offer. He also argued that he had been unexpectedly called into the meeting, was not given a reasonable opportunity to arrange for a companion to attend and was given insufficient time to consider the proposal. 

The tribunal accepted the managing director's evidence and rejected the allegation that he had threatened Mr Tarbuc. It concluded that there had been no improper conduct and that the conversation was protected by section 111A. 

However, the tribunal surprisingly concluded that the conversation was inadmissible not just in relation to the ordinary unfair dismissal claim but also in relation to all of Mr Tarbuc's claims. 

Mr Tarbuc appealed.

What did the EAT say about the scope of section 111A?

The EAT held that the tribunal had applied section 111A too broadly.

The EAT said that section 111A protection is claim specific. It applies only to ordinary unfair dismissal claims where there is no improper conduct. It does not prevent a conversation being relied on in other types of claims.

As a result, the EAT confirmed that the conversation could be relied on in the unlawful deduction from wages and part-time worker claims. 

The EAT recognised that this can create practical difficulties in cases involving multiple claims. Mr Tarbuc relied on the same alleged treatment both as evidence of less favourable treatment because of his part-time worker status and as evidence supporting his unfair dismissal claim. This meant that some evidence could be admissible for one claim but inadmissible for another. 

The EAT recognised that separating evidence in this way would require ‘mental gymnastics’. However, it noted that tribunals regularly deal with similar evidential issues.

Did the tribunal properly consider all allegations of improper conduct?

In relation to the unfair dismissal claim, where section 111A could potentially apply, Mr Tarbuc argued that the tribunal had taken a narrow view of the circumstances surrounding the meeting when considering if the employer had behaved improperly. 

He argued that the tribunal failed to properly consider the Acas Code of Practice on Settlement Agreements ('the Code'). In particular, he said it had not adequately considered that he had been unexpectedly called into the meeting, was not given a reasonable opportunity to arrange for a companion to attend and was given insufficient time to consider the offer.

The EAT rejected the suggestion that the tribunal had ignored the Code altogether. However, it found that the tribunal's assessment of improper conduct was incomplete. 

The tribunal focused primarily on what happened during the meeting and failed to consider other relevant factors, including how the meeting had been arranged and whether Mr Tarbuc had been given a fair opportunity to be accompanied. 

The EAT emphasised that the fact an ambush meeting and refusal of a companion were not found to amount to improper conduct in Gallagher v McKinnon's Auto and Tyres Limited did not mean those factors could never support such a finding. Tribunals must assess whether conduct is improper by considering all the circumstances of the case.

The EAT therefore concluded that the tribunal had failed to consider all relevant factors and had not provided adequate reasons for concluding that there had been no improper conduct.

It is worth noting that the EAT gave little weight to Mr Tarbuc's complaint about the time given to consider the proposal. He had rejected the offer immediately and had refused to read the letter containing the key terms. In those circumstances, the period for considering the proposal could not have contributed to any pressure on him. 

What happened next?

The EAT proposed a practical way forward. The tribunal could hear all relevant evidence and then decide, at the end of the case, whether there had been improper conduct. If there had not been, it could disregard the conversation when determining the ordinary unfair dismissal claim.

What does this mean for employers?

This decision serves as an important reminder that you should focus on the process surrounding exit discussions, not just the words used during it. 

Tribunals will look at the process as a whole when assessing improper conduct. A protected conversation may lose its protection not only because of what an employer says during the meeting, but also because of how it is arranged and conducted. 

You should therefore think carefully about the wider process. Ensure the employee is not taken by surprise, consider giving them the opportunity to be accompanied, and make sure the overall process does not place undue pressure on them. 

It is important that you follow the Acas Code of Practice on Settlement Agreements, which tribunals must take into account. It sets out a non-exhaustive list of behaviour that is likely to amount to ‘improper behaviour. That includes not giving an employee enough time to consider a written offer and telling an employee that if they don't agree to the offer, they will be dismissed. 

You should therefore ensure that the entire process surrounding such conversations is handled carefully and fairly, not just the discussion that takes place in the room. 

It is also important to remember that section 111A protection is limited. It only prevents exit discussions from being relied on in a subsequent ordinary unfair dismissal claim. The same conversation can therefore be admissible as evidence to the tribunal in other types of claims. 

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