Section 111A Employment Rights Act 1996 – pre-termination negotiations: what are they and what do they mean?

Chris Hadrill, the partner in the employment team at Redmans, analyses the effect of “protected conversations” (also known as “pre-termination negotiations”) under section 111A of the Employment Rights Act 1996

  1. What is the wording of section 111A Employment Rights Act 1996?
  2. What does section 111A mean?
  3. What is the effect of section 111A?
  4. When can pre-termination negotiations be put before an Employment Tribunal?
  5. What is “improper behaviour”?
  6. Cases involving section 111A

The wording of section 111A Employment Rights Act 1996

(1)Evidence of pre-termination negotiations is inadmissible in any proceedings on a complaint under section 111.

This is subject to subsections (3) to (5).

(2)In subsection (1) “ pre-termination negotiations ” means any offer made or discussions held, before the termination of the employment in question, with a view to it being terminated on terms agreed between the employer and the employee.

(3)Subsection (1) does not apply where, according to the complainant’s case, the circumstances are such that a provision (whenever made) contained in, or made under, this or any other Act requires the complainant to be regarded for the purposes of this Part as unfairly dismissed.

(4)In relation to anything said or done which in the tribunal’s opinion was improper, or was connected with improper behaviour, subsection (1) applies only to the extent that the tribunal considers just.

(5)Subsection (1) does not affect the admissibility, on any question as to costs or expenses, of evidence relating to an offer made on the basis that the right to refer to it on any such question is reserved.

What does section 111A mean?

Section 111A means that any “pre-termination negotiation” (also known as “protected conversations“) between an employer and an employee which meets the following criteria cannot be put before a court or tribunal:

  1. An offer is made or discussions held with a view to to terminating the employee’s employment on terms agreed between the employer and employee; and
  2. These discussions are held prior to the termination of employment; and
  3. The only claim which applies is a potential claim for unfair dismissal

If the above criteria are met then the only way that the discussions could be admissible would be if anything is said or done which is “improper” (e.g. if the employer engages in improper behaviour by threatening to fire the employee if they don’t accept any settlement offer made then this could mean that the contents of the conversation could be used in an Employment Tribunal claim). What is “improper” for the purposes of section 111A is explored below.

The effect of section 111A Employment Rights Act 1996

Under section 111A(1) of the Employment Rights Act 1996 (“ERA 1996”) “pre-termination negotiations” can be shielded from the Employment Tribunal in an unfair dismissal claim unless there has been “improper behaviour”. Unlike the common law “without prejudice rule” (see our article on what without prejudice means), there is no need for the parties to be in dispute in order for the section 111A rule to apply. Protection from admissibility includes the very fact that pre-termination negotiations have taken place, not just the details of those negotiations.

The effect of section 111A is that an employer and their employee can have ‘full and frank’ discussions regarding problems at work, and not have the contents of these discussions used against them in an Employment Tribunal claim – the idea is that this encourages the parties to be honest with each other and increases the prospects of settling any claim that the employee might have.

When can pre-termination negotiations be put before an Employment Tribunal?

Pre-termination negotiations under section 111A can be put before the Employment Tribunal in, broadly, three circumstances:

  1. If any application for costs is made by either party where the offer made in the pre-termination negotiations is relevant and/or
  2. If it is not a claim for unfair dismissal which is being brought (i.e. if your claim is for breach of contract, unlawful detriment, discrimination, and/or automatic unfair dismissal (among others)); and/or
  3. If there was any improper behaviour in the pre-termination negotiations

In these circumstances the fact and content of any offers or discussions may be referred to in proceedings unless they are also covered by the “without prejudice rule”.

What is “improper behaviour”?

If anything said or done is improper or connected with improper behaviour, evidence of pre-termination negotiations can be put in evidence before the Employment Tribunal only if the Tribunal thinks it is just to do so (section 111A(4), Employment Rights Act 1996).

This means that the following must be examined by the Employment Tribunal before the pre-termination negotiations can be put in evidence:

  1. That something has been said or done which constitutes “improper behaviour”; and then
  2. To what extent it is just and equitable to put the evidence of the pre-termination negotiations before the Employment Tribunal

Examples of “improper behaviour”

So what is improper behaviour? The language of the legislation is left very broad, so it is up to the Employment Tribunal in any given case what it defined as “improper behaviour”.

Some examples of improper behaviour could include (please note that this list is not exhaustive):

  • Any type of harassment, bullying and intimidation, including through the use of offensive words or aggressive behaviour;
  • Physical assault or the threat of physical assault and other criminal behaviour;
  • All forms of victimisation;
  • Discrimination because of age, sex, race, disability, sexual orientation, religion or belief, transgender, pregnancy and maternity and marriage or civil partnership;
  • Putting undue pressure on the employee (for example, the employer not giving the employee sufficient time to consider a settlement offer, or the employer stating that if the employee doesn’t agree to the settlement agreement then they’ll be dismissed)

Further reading: read our guide on settlement agreements here

Cases involving section 111A

  • Ms Stolk v Hunts Food Service Limited (1402790/2018) – in this case the Employment Tribunal upheld the Claimant’s claims that she was unfairly dismissed and discriminated against for pregnancy and maternity related reasons (our analysis of the case)
  • Mrs D Lingard v Leading Learners Multi Academy Trust (2401985/2017) – in this case the Employment Tribunal held that there had not been inappropriate behaviour where an employee was only given four days to accept a settlement offer (our analysis of the case)
  • de Crespigny v Information Security Forum Ltd (2300316/2014) – in this case the Employment Tribunal held that discussions about the future of a CEO’s employment were admissible in his claim for unfair dismissal as there was no settlement offer made to the employee, nor were there any negotiations with a view to his employment being terminated on agreed terms (our analysis of this case here)
  • Faithorn Farrell Timms LLP v Bailey [2016] IRLR 839 – in this case the Employment Appeal Tribunal deliberated on the same point (in this case the employee argued that she had opened the pre-termination discussions, was the only who had made an offer of settlement, and that her employer had not made any genuine attempt to resolve the dispute)  but decided that it could not determine this issue and remitted the case back to the Employment Tribunal (our analysis of the case)
  • Basra v BJSS Ltd [2017] UKEAT 0090_17_1912 – in this case the Employment Appeal Tribunal held that the exclusion of pre-termination evidence only applies to negotiations taking place before the employment has terminated and so cannot be invoked until the effective date of termination has been determined (the decision of the Employment Appeal Tribunal; our analysis of this case).

Our lawyers’ views on section 111A Employment Rights Act 1996

The section 111A rule does, in certain circumstances, give employers enhanced protection and allows them to have ‘full and frank’ conversations with their employees. However, the protection that it allows to these conversations can sometimes be artificial in nature – for example: in a case where an employee was alleging that they had been unfairly dismissed and, in addition, that their dismissal was discriminatory the fact and/or content of any pre-termination negotiations would be inadmissible for the purposes of the unfair dismissal claim but not inadmissible for the purposes of the discrimination claim.

Chris Hadrill, a specialist employment solicitor in the employment team at Redmans, commented: “If your employer wants to have a protected conversation with you then it’s generally wise to seek legal advice on the terms of the offer and why your employer wants to offer you the exit package – a failure to seek advice can potentially hamstring negotiations, as you may be unaware of your rights”.