Discrimination Diaries: Protected Conversations

Oct 16, 2019

Our discrimination expert, Senior Solicitor Katie Harris, answers your questions on difficult discrimination issues in employment. Names and circumstances have been changed to protect the identities of those involved.

This week Katie looks at when a Protected Conversation with an employee might not be as protected as initially thought….

The Question:

Hello, I’m an HR business partner for an SME and we’ve just received a call from ACAS informing us that an ex-employee, Lucy. Lucy is bringing a claim against us for sex discrimination and is asking for over £100,000 in compensation (although her annual salary was only £40,000 per year).  I just don’t know how to go about responding to this, and don’t feel like we’ve done anything wrong.  Are you able to help?

The context to this story is that Lucy returned from maternity leave about 3 months ago. A week after returning to work, she asked to reduce her hours to part time (3 days a week).  We went through the full process, but couldn’t reach agreement on her hours as it just wasn’t something the business could accommodate.  Lucy seemed to accept this decision, and the business’ reasons for it.

Shortly afterwards, her manager heard from some of his team that Lucy had been saying things like ‘I really don’t think I want to stay here if I can’t work part time’; ‘I’m just so unhappy at work as I miss my kids so much’; and ‘I just don’t really feel like I get on with Martin [her manager] anymore, I don’t agree with his vision for the Company – he’s too old school and needs to move with the times’

Lucy never raised a grievance, and didn’t even appeal the outcome to her flexible work request. However, because of these comments we decided to have a ‘protected conversation’ with her to see if she would be interested in an exit package. We honestly thought it may be a good solution for both Lucy and the business, particularly if she wasn’t happy anymore.

However, a few days after we had the ‘protected conversation’, Lucy resigned. Lucy didn’t give reasons for her resignation, she just said she didn’t want to work her notice which we agreed on. Lucy’s last day was over a week ago now.

 We were therefore shocked to have received the call from ACAS. To make it even worse it looks like Lucy has referred to the ‘protected conversation’ we had with her as the reason for her resignation. She’s said that by having this conversation it felt like we were deliberately trying to push her out, and that this is because of her child care responsibilities and need to work part time.  We’re utterly astonished as she’s never mentioned any of this to us before.  Can she really refer to the ‘protected conversation’ we had?  I thought this was ‘without prejudice’ and therefore couldn’t be used against us?

 The Answer:

 Protected Conversations    

 It’s often a shock to receive a call from ACAS after an employee’s departure, especially when you feel that as a business you’ve done all you can to support someone.  Unfortunately, this does happen.  For whatever reason, some employees are reluctant to address issues with their employer, but feel emboldened when they leave employment.  However, the ACAS Early Conciliation process is set up for just this purpose – to try and ‘catch’ employment disputes before they end up in tribunal.

 …So when can a ‘protected conversation’ be used as evidence against an employer?  It may surprise you to learn that it is indeed possible to use the contents of a ‘protected conversation’ as evidence in a tribunal claim, but only in certain circumstances.

 A ‘protected conversation’ is a conversation with an employee about the termination of their employment.  The right exists under section 111A of the Employment Rights Act 1996.  It is typically used to present employees with the option of a settlement agreement, and allows both employees and employers to speak freely, protecting the conversation so that it can’t be used as evidence in a tribunal claim.  However, there is a catch.  The protection only applies to unfair dismissal claims, and only if there hasn’t been any ‘improper conduct’. 

 As the right does not extend to claims for discrimination, it is perfectly possible for someone to use a protected conversation as evidence, but only if the conversation itself, or the reasons for having it, were themselves discriminatory.  In addition, the employee may allege that the employer has placed undue pressure on them to accept the settlement agreement offered, or has conducted the conversation in some other ‘improper’ way, such as being overly aggressive.  In either case, an employee will be permitted to use the conversation, and its contents, as evidence in a tribunal. 

 In Lucy’s case, it does indeed sound as though she is alleging that the protected conversation you had was an act of discrimination itself.  In these circumstances, it’s likely a tribunal may allow it as evidence.  However, it will be open to the business to argue its case and present evidence that there hasn’t been any discrimination.  If the tribunal accepts the business’ arguments, then it won’t take the conversation into account when making its decision.

 Based on what you have told me, you should be able to defend Lucy’s claim (and her suggestion that the ‘Protected Conversation’ should be disclosable), provided you:

  • have sound business reasons for rejecting Lucy’s flexible working request;
  • followed a proper process;
  • adequately consulted with Lucy and considered alternatives;
  • made it clear to Lucy the reasons why you were having the conversation with her;
  • told Lucy that it was her choice whether to accept the offer, and (if she didn’t) her employment would continue as normal; and
  • she was given ample time to consider her options and seek advice;

 However, you will need to provide ample evidence justifying why the business couldn’t accommodate part time work, and the manner in which the offer of a settlement agreement was presented to Lucy.   

 Responding to ACAS

 It’s important to remember that ACAS provide a conciliatory service with an aim to resolve workplace disputes without the need for an Employment Tribunal claim.  However, should you engage in the process?

 Firstly, you are not obliged to respond – if you don’t wish to engage in the ACAS Early Conciliation process, you simply inform ACAS of this, and they will issue a certificate. This will allow Lucy to issue a claim in the Tribunal. Doing this can have some tactical advantages, particularly if you think Lucy’s claim is weak.  It sends a strong message, and if Lucy is just ‘trying it on’ she might not go as far as actually issuing a claim.

 However, if you have a genuine wish to settle the dispute before it goes any further, it is wise to at least have that conversation with ACAS.  Once a claim is issued it can be more difficult (and therefore more costly) to settle, since employees often become entrenched in their position once they have submitted a claim.

 If you do want to consider entering into settlement discussions, the following points can help you to decide on the best approach to take:

  • Prospects of success – how likely are you to defend the claim? If the claim is weak, you may be disinclined to settle, or settle for a low ‘commercial’ amount in order to avoid any further time or cost in dealing with it.  Conversely, if there is a high degree of risk, then your objective should be to settle as quickly as you can, for as low as you can.
  • The reality of Lucy’s situation – If Lucy issues a claim she will need to either instruct a legal representative, or manage the claim herself. Legal costs can be prohibitive, ‘No win, no fee’ arrangements can be difficult to come across, and insurance providers will require Lucy’s claim to have good prospects of success before they will agree to fund it.  Depending on Lucy’s circumstances, the pressures of funding or running her claim may make her more eager to settle.  
  • Current commercial pressures on your business – you need to consider how much time you and your company will need to deal with a claim. Although legal representation is an obvious and immediate cost, you should also consider, for example, how long key individuals will need to spend preparing witness statements, and gathering documents for disclosure.
  • Are there any commercial implications of a negative tribunal finding? Businesses are often required to disclose findings of discrimination as part of a tender process, particularly with the public sector. This can result in lost tenders, inflicting substantial damage to your business.  This in itself can raise the risk profile of a tribunal claim, particularly where prospects of success are finely balanced.
  • Lucy’s approach to settlement – is her assessment of the value of her claim reasonable? If Lucy’s expectations are unrealistic, it might be difficult to engage in sensible discussions with her, making settlement unlikely. 

Turning now to the actual call with ACAS. It may be preferable for you to instruct a lawyer to have this conversation for you. However, if you make the call yourself, think about what you’re going to say in advance.

 My suggested approach is as follows:

  1. Set out the factual background from your perspective, focusing on facts supporting your case.
  2. Ask whether Lucy has obtained new employment or what steps she’s taken to find new employment? This is a legitimate question, and will help you assess the value of Lucy’s claim.
  3. Ask what Lucy is looking for? See if you can get her to make the first offer, if she hasn’t already.  This will give you an idea of her expectations. 
  4. Point out arguments that will reduce the value of her award. For instance, any award made to Lucy may be reduced by up to 25% for failing to follow the ACAS Code as she did not raise a grievance.
  5. Remember that this is a negotiation. Decide on your target settlement figure, and submit offers below this.  You want to give yourself some ‘wiggle room’ for negotiations.
  6. Think outside the box – are there other things you could offer Lucy that would be of value as ‘bargaining chips’ such as a reference, releasing her from post termination restrictive covenants, or allowing her to retain a benefit?

Good luck!

All discrimination claims are very fact specific and this note is intended as a general guidance only. If you have any discrimination issues, we would recommend seeking legal advice. Our employment team will be pleased to assist you, and can be contacted at employment@herrington-carmichael.com or 0118 977 4045.

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