Pre-Termination Negotiations

Nov 12, 2024 | News | 0 comments

In the recent case of Gallagher v McKinnon Auto and Tyres, the Employment Appeal Tribunal (EAT) upheld the original tribunal’s decision that pre-termination negotiations between the Claimant and the Respondent were inadmissible in his unfair dismissal claim.

Under Section 111A of the Employment Rights Act 1996, pre-termination discussions, generally known as ‘protected conversations’, are inadmissible in ordinary unfair dismissal claims provided they are conducted without ‘improper behaviour’. Thereby allowing confidential conversations about mutually agreed employment termination terms, even without a prior dispute being in existence. The provision is supported by an ACAS Code of Practice. 

The Claimant worked as a branch manager and was absent due to illness. Upon his return, the Respondent decided his position was no longer needed and proposed a redundancy process. At a meeting stated to be ‘off-the-record’, the Claimant was offered a settlement agreement and given 48 hours to respond, with the indication that redundancy would follow if he declined. The Claimant refused and was subsequently dismissed for redundancy. He claimed unfair dismissal and attempted to use the settlement discussions in evidence. The original tribunal ruled these discussions were protected pre-termination negotiations, and since there was no improper behaviour, they were inadmissible.

The Claimant appealed to the EAT, arguing that the tribunal’s decision in this regard was perverse. He argued there was improper behaviour as:

  • He was told the meeting was a ‘return to work’ meeting and was taken by surprise;
  • He was only given 48 hours to consider the offer; and
  • He was told he would be made redundant if the offer was not accepted.

The EAT, dismissing the appeal, held that 1 and 2 did not constitute improper behaviour. In respect of 3, the EAT held that it was important to distinguish redundancy from other disciplinary situations. The ACAS Code does state that a form of undue pressure can be telling an employee that, if they do not accept the offer, they will be dismissed.

However, this guidance specifically refers to a disciplinary situation. In this case, a redundancy situation had arisen. It was accepted that the Respondent had told the Claimant that his role was redundant.