Protected conversations: An unwelcome layer of complexity?
Author: Darren Newman
Consultant editor Darren Newman asks if the Government's proposed "protected conversations" could end up rivalling the now abandoned statutory dispute resolution procedures in terms of setting out to reduce litigation but in reality creating a legal nightmare.
Of all the employment law reforms floated by the Government last week, the one that grabbed my attention was the potential introduction of "protected conversations". These are being described in various ways by ministers commenting in the press, but it is worth looking at the only formal description that we have, which is set out in the Government's response to the resolving workplace disputes consultation.
The Government is proposing to consult on the introduction of protected conversations that would "allow employers, or indeed employees, to initiate a conversation about an employment issue at any time (ie without the existence of a formal dispute) as a way of resolving the matter without fear".
Essentially what the Government is proposing is a massive extension of the "without prejudice" principle. When two parties are seeking to resolve a dispute, it has long been accepted that admissions that they make in a conversation declared to be without prejudice cannot generally be used against them in the proceedings. This facilitates frank negotiations in which each side acknowledges the potential weaknesses in its case in the hope of reaching a realistic settlement.
However, the essence of a without prejudice conversation is that it is carried out with a view to resolving a dispute. Conversations between an employer and an employee that take place during performance management discussions, for example, do not meet this requirement because there is no dispute to resolve. And, even if the parties agree that the conversation will be without prejudice, the contents could still be used in a tribunal if they are relevant to the issues in the case. Thus, in BNpParibas v Mezzotero [2004] IRLR 508 EAT, the Employment Appeal Tribunal (EAT) held that the tribunal was entitled to hear what had been said in a "without prejudice" discussion instigated by the employee's managers during the course of a grievance hearing.
It seems that the Government is proposing to overturn this rule and allow protected conversations to take place even when there is no formal dispute to be resolved. A typical situation might involve an employee who is performing poorly. By entering into a protected conversation the employer could express some scepticism about the employee's ability to improve sufficiently over the course of the performance review period, and offer to give the employee a good reference and a small pay-off if he or she resigns. Because the conversation is protected, the employee will not be able to use what was said as evidence that the employer did not enter the process with an open mind.
I can already see that many employers will seize on this suggestion as an absolutely splendid idea. Indeed there are all sorts of situations in which employers feel constrained in what they can say to a difficult or troublesome employee for fear of an employment tribunal claim. It is no use people like me arguing that employers are already allowed to be perfectly frank with their employees, or that it is often a lack of frankness that gets them into trouble. The fact is that employers very often do fear that they cannot say anything remotely negative to an employee without being dragged before a tribunal.
Nevertheless, the proposed protected conversation idea is, in my view, an incredibly bad one. It will simply not have the effect that it is claimed it will. Instead of being able to speak "without fear", employers are even more likely to get caught up in legal wranglings.
This is because the without prejudice principle is not without its limits. A "without prejudice" conversation does not mean that one is allowed to say anything at all. There is an exception if one of the parties behaves with "unambiguous impropriety", for example by openly admitting unlawful discrimination or indicating an intention to do something illegal.
Because protected conversations need to be introduced by legislation, there will have to be a statutory definition of what can and cannot be said in the course of a protected conversation. No matter how carefully such a definition is drafted, it will inevitably involve some confusion or grey area, and cases where it is not clear if the comments made by the employer satisfy the statutory definition.
Because an employee would need protection from being tricked into having a protected conversation, there would also need to be some sort of process or procedure to follow in order to initiate one. This would probably involve the employee being informed of the effect of a protected conversation and that he or she has the right not to take part. Because such a right would seem to be essential, we could also expect a right not to be dismissed or subjected to a detriment for failing to enter into a protected conversation. If the employer cannot be taken to a tribunal because of what is said, presumably it will also be unfair to dismiss or victimise the employee for anything that he or she says.
When you think about it, this starts to become a rather complicated right. Employers will need to be confident that they are following the correct procedure before entering into a protected conversation, and that what they then say fits within the protection set out in the legislation.
The inevitable result of this is that, before participating in a protected conversation, a sensible employer will take legal advice to ensure that the conditions for the conversation are indeed met. This will have the effect of bringing lawyers into the process far earlier than is desirable - and well before there is any proper dispute to be resolved.
Employees who are dismissed and who claim that the contents of the protected conversation indicate some impropriety on the part of the employer (in terms of either discrimination or simple unreasonable conduct) are likely, as part of their claim, to argue that the contents of the conversation should be considered by the tribunal. This will lead to preliminary hearings to consider whether or not the evidence is admissible. The EAT will be called on to rule on the meaning of the legislation, and case law developments will make the issue more and more complicated.
Employers will no doubt recall the short-lived statutory dispute resolution procedures. Their purpose was to encourage employers and employees to settle their disputes without having to resort to the employment tribunals, but they created a litigation nightmare.
Those lobbying for protected conversations are often the same people who think that employment law needs to be simplified. They might, therefore, want to think again about creating a new legal creature that will inevitably add a new layer of complexity to what should be the relatively straightforward task of managing employees.
