Rob McCreath, partner at Archon Solicitors, explains why the introduction of a law to allow employers to have "protected conversations" with underperforming workers could help to reduce tribunal claims, in a guest blog for XpertHR's Tribunal Watch.
Rob McCreath on "protected conversations"
Some barmy proposals have been made for employment law reform recently. They have rightly been torn to shreds by most HR and legal commentators. But the proposal that employers should be able to have "protected conversations" with employees about performance issues (and potentially other issues) could be beneficial, if implemented with care.
Stephen Simpson's blog on Tribunal Watch set out 15 reasons why he believes the proposal won't work. Before dealing with his points (many of which are entirely valid as questions), let me present a scenario that I expect will be familiar to many readers.
An employer has legitimate performance issues with an employee, X. These have been raised with X in the usual way and informal performance management and support measures have been put in place, but X is still struggling. X may have been over-promoted or may simply be in the wrong job. This stage I refer to below as "the Point".
In order to protect itself against an unfair dismissal claim, the employer is advised that it must take X through a procedure under which X receives formal warnings and further opportunities to improve to an acceptable standard of performance. X feels humiliated. This leads to a deterioration in the working relationships between X and immediate colleagues. X takes out grievances against them. Things get worse. They retaliate. X comes to believe that the situation is a conspiracy against X personally, due to specific factors such as age, sex or race. Eventually, X is dismissed. The employer now not only faces an unfair dismissal claim, but also an unlawful discrimination claim involving other employees as additional respondents, in respect of which compensation is uncapped.
Meanwhile, huge and continuing damage has been done to the productivity and morale of the unit in which X worked. Damage has also been done to X, whose self-esteem is in tatters and who is now unemployed, with job prospects looking bleak.
Now let's wind back to "the Point" referred to above. If the employer was advised at that stage that it could have a conversation with X starting along the following lines, we might have a different outcome:
"X, as you know we have not been happy with your performance for some time and you don't seem to have been able to improve despite the efforts that have been made to support you. We have reached the stage where we feel that we will have to start formal proceedings under our poor performance procedure. If you do not improve to an acceptable level, this could lead to your dismissal.
However, we would prefer not to have to put you through that process, because we think that, although you have genuinely been trying hard, we don't think you are suited to the role. There are one or two other possibilities within the organisation that we think might suit you better. They are at a slightly lower level, but there would potentially be opportunities for promotion, if things go well.
Alternatively, if those opportunities do not appeal to you, we would be prepared to reach agreement with you to allow you a further three months in your current role. You would be allowed time off to look for another job elsewhere and we would be able to give you a decent reference, focussing mainly on the aspects of your work that have been positive. At the end of the three months, your employment would come to an end and we would also make a modest termination payment to you of £Y. If you went for this option, you would be expected to sign up to a formal compromise agreement on which you would need to take independent legal advice."
This sort of conversation clearly opens up some possibilities that are far more constructive from both the employer's and X's perspectives. X could, of course, decide not to take up any of the options on offer, in which case we would be back to using the formal procedures. However, an alternative avenue of communication would have been established, which could lead to a settlement at a later stage.
Conversations of this kind do, of course take place even under the current rules. An attempt is usually made to label them "off-the-record" or "without prejudice". However, the problem with the "without prejudice" approach in this context is that strictly speaking without prejudice privilege only applies when there is an existing legal dispute to settle. In X's case, the employer would be exposing itself to the risk of the conversation being used against it in an employment tribunal. Many employers are not prepared to take that risk and so they stick to the formal procedures, with unfortunate consequences.
In my view, rules that effectively extend the "without prejudice" principle to allow an employer to have that sort of discussion without a serious risk of it being used in evidence would be a beneficial step forward for all concerned.
I turn now to the questions and potential objections raised in Stephen Simpson's blog. I would echo Stephen's point that we do not yet know the detail of the proposals and have therefore sought to provide answers based on the way in which I would suggest the proposals should be implemented. This may be a tad unfair on Stephen!
1. Will it be employers that will nominate when a discussion is protected or will the employee have to agree too? Why would any employee ever agree to have an off-the-record conversation with his or her employer?
Either the employer or the employee (or employee/union rep on the employee's behalf) could initiate. The other party would have to agree to have the conversation on a protected basis. The employee would be likely to agree in many cases, as there would be nothing to lose and the employee may in any event be looking for a dignified way out.
2. Will there be a limit on the number of protected conversations that an employer can have with a particular employee? If so, how will this number be verified?
There will be no limit, but neither party will be in a position to force the other into having a protected conversation.
3. There are likely to be challenges in the courts on the basis that the Government shouldn't allow employers to "opt out" of discrimination legislation in "anything goes" conversations.
There will need to be safeguards (as there are under the current "without prejudice" principles) against protected conversations being used as a cloak for discrimination or other obvious impropriety.
4. There may be human rights implications in making certain evidence inadmissible, on the basis that the claimant has been denied entitlement to the right to a fair hearing to which he or she is entitled under the European Convention of Human Rights.
There is no serious suggestion of any such implications under the current "without prejudice" principles.
5. Protected conversations should not be an alternative to good and open management and may have the opposite effect of the stated aim of encouraging open discussions. Employees will become suspicious whenever conversations are protected.
I agree that they should not be an alternative to good and open management. But they should provide a potential alternative to formal procedures.
6. It is not uncommon for staff who feel that they are being discriminated against to secretly record conversations. If clearly discriminatory comments are recorded, will these still be inadmissible?
Clear evidence of unlawfully discriminatory conduct (and other obvious impropriety) is currently admissible under the without prejudice principles and the same would apply to protected conversations. There are issues about the admissibility of secret recordings, but they are not strictly relevant to this discussion.
7. If an employee is forced to resign because he or she feels singled out with protected conversations, will the discussions still be inadmissible in a constructive dismissal claim?
Employees should not feel forced to resign. If they do not want to participate in a protected conversation they cannot be forced to do so. If, however, the discussions are abusive, they will be admissible.
8. Will there be a minority of managers and employers misusing protected conversations and will there be any remedy for employees in these cases?
There will probably be some attempts at misuse. But if they involve obvious impropriety, the protection will be lost and the evidence will be admissible.
9. What if the employee tries to admit the evidence in the employment tribunal anyway? This could be common, given the number of litigants-in-person that bring claims and could create a major sifting job for tribunals.
Tribunals are well used to dealing with is sort of issue on a routine basis in relation to without prejudice material.
10. If the employer makes some performance-management discussions protected, but not others, how is possible to separate the evidence as to what's admissible and what's not?
Employers will be advised to keep the two strands separate, as currently happens with without prejudice discussions.
11. Will claimants simply find other evidence, actually leading to more flimsy cases coming before the tribunals?
If there is other evidence of unfair conduct by the employer, it should be admissible. If it is flimsy, it should not be upheld.
12. What will the status of a protected conversation be if the employee attempts to raise a grievance about how it has been conducted?
Employees will not be able to raise such grievances, other than in relation to alleged discrimination or other obvious impropriety within protected conversations.
13. Will the employer be prohibited from taking action against a manager if he or she is accused of bullying and would the conversation be inadmissible if the manager is later dismissed and brings a claim?
If there was evidence of bullying, that would be likely fall within the definition of obvious, impropriety and so would be admissible.
14. Are the employee's actions during a protected conversation beyond reproach, for example if the employee verbally abuses a manager? Or will confidentiality work only one way?
Evidence of obvious impropriety would be admissible against either party.
15. The inability to admit evidence from a protected conversation might actually disadvantage the employer, if there is evidence in its favour in a protected conversation that is inadmissible.
Employers would be advised to keep the two strands separate, as indicated above. If the protected conversation did not result in an agreement, the employer would be advised to complete the relevant formal procedures outside any protected conversations so that there would be full evidence available of a fair dismissal.
Rob is a specialist employment solicitor and CEDR accredited mediator.