How To Conduct A ‘Protected Conversation Meeting’: Settlement Agreements

Sometimes when there is a relationship breakdown between the employer and employee, there is a need for the employer to look at the best possible outcome of this situation and there are circumstances when a ‘Protected Conversation Meeting’ can be the best solution.

Why and when conducting a protected conversation meeting might be necessary

Employers may notice that an employee has become disruptive. The employer may have worked out they are not the right fit for the role or the business but the employee may not have the confidence to leave their employment. Instead the employee can ruffle feathers until they are managed out, whilst earning the basic wages and in receipt of benefits. The formal route to ending this situation, using disciplinary and dismissal measures, can be a lengthy process which is why a protected conversation might be worth considering to speed things up.

The formal disciplinary and dismissals procedure

You can deal with these issues through a 3-step formal disciplinary and dismissals procedure, very easily. But this takes time, and requires investigating the issues, invites to meetings, rescheduling meetings, holding the meetings, note taking, typing up notes, drafting the outcome letter and monitoring the work, as well as all the preparation work for each meeting.

The shortest time you can expect to hope for, from identifying a disciplinary issue for the first time, to managing the employee out through the disciplinary and dismissal procedure and dismissing them, is a minimum of 3 weeks. But managing to conclude the situation this quickly only happens on very rare occasions. This is providing you have a very efficient HR expert working with you and you have a manager that is competent to identify the issues and address them. This time frame is based on serious breaches, such as gross misconduct. The reality is that most situations take longer than 3 weeks and often up to a year. 

The drawbacks of the formal route: can you afford to wait?

Do you have the time and money to wait this long for this person to leave the business when they are doing so much disruption? The longer they stay in your employment, the more money they are costing you. So, it’s worth thinking about the costs of keeping them on, loss of business, staff going off on sick leave, downturn in productivity, the individual accruing more annual leave and pension contributions. Most occasions, ’paying them off’ works out much cheaper.

So what is the alternative to following the above formal procedure? And what does ‘off the record conversation’ mean? 

Paying an employee off, is also known as a ‘settlement agreement‘. It’s a route an employer can take when there is a breakdown in the relationship. The disciplinary procedure can take some time before dismissal takes place, so using a ‘settlement agreement’ helps a business to get to a resolution, where the employees leave the employer quicker, with very little risk to the business. It’s a mutual agreement between the employer and employee as the relationship cannot continue and where the employer will make an offer and the employee may wish to negotiate.

How do you put a ‘settlement agreement’ in place?

Ensure reasonable grounds

1. You firstly need to ensure that you have reasonable grounds for asking someone to leave the business in this way. As mentioned above, the relationship breakdown and breaches etc are sufficient grounds. If an investigation uncovered some serious issues with the employee, you would want to discuss the discovery of the issues with them first.

Request a meeting

2. The next step is to request a meeting with the employee. You are not required to give any notice to the employee. It would just be a request to attend a management meeting.

How to conduct a protected conversation meeting

During the meeting you should start by explaining to the employee that you wish to have a protected conversation (off the record) about their employment. You would then request them to sign the protective conversation agreement that you have drafted. Once signed, you can then begin a conversation regarding the issues that have arisen and that you feel you cannot continue with the employment relationship; and that you have decided that the employment relationship should come to an end with a mutual agreement. You explain the basic terms and confirm to the employee that they will be sent an agreement unless you have this already drafted.

Can an employee be accompanied at a ‘protected conversation’ meeting?

There is no statutory right for the employee to be accompanied at any such meeting. But best practice would be to permit a work colleague or trade union official into the meeting.

Can I force an employee to sign a ‘settlement agreement’?

No. Settlement agreements are voluntary agreements. If an employee does not wish to sign it then they continue in their employment and you are permitted to continue any other formal processes. There can be negotiations until an agreement is reached.

Should a protected conversation meeting be recorded?

No, a protected conversation meeting should not be recorded. Recording such a meeting can undermine its “off the record” nature and could lead to complications if the matter escalates to an employment tribunal.

5 key points to be aware of when dealing with a protected conversation

1. Without Prejudice: The conversation is intended to be off the record, meaning it cannot be used in court or tribunal proceedings. This is similar to “without prejudice” discussions, but it’s specifically protected under Section 111A of the Employment Rights Act 1996.
2. Initiation: Either the employer or the employee can initiate a protected conversation. It typically involves discussing a settlement agreement, where the employee agrees to leave the company in return for a financial package.
3. Limits on Use: The protection applies only to unfair dismissal claims. It does not cover claims related to discrimination, harassment, or other unlawful acts.
4. Improper Behaviour: If there’s evidence of improper behaviour, such as bullying, discrimination, or undue pressure, the protection can be lost, and the conversation may be used as evidence in a tribunal.
5. Formal Agreement: For the conversation to result in a binding settlement, the employee typically needs independent legal advice before signing any agreement.

What happens after the protected conversation meeting?

An employee is given time to digest the terms within the agreement, and can consult their solicitor. You are required to cover some costs of them visiting their solicitor. They will have a minimum of 10 days to do this. During this period you can request they do not attend work, or undertake any work on behalf of the company, and are on paid leave. It is always recommended that you put a clear time frame on this, such as 10 or 12 days and communicate this to the employee.

The settlement agreement

The settlement agreement which sets out the terms will also have a package, including their notice, any owed pay, annual leave accrual and an ex gratia payment and are likely to include a reference. The agreement is legally binding, just like an employment contract. The purpose of the agreement is to prevent the employee making claims to an employment tribunal for a breach of their rights.

If an investigation took place, should I communicate the outcome?

It is best practice to deliver a summary of the investigation, as this is evidence of what has led you to this meeting. But at this stage they are not permitted to see any documents relating to the investigation unless they are making a subject access request under GDPR.

Seek employment law advice from an expert

‘Settlement agreements’ are technical. They have very specific terms permitted by employment law. We would always recommend you seek advice from a qualified and experienced employment law and HR expert.

Call us for a free no obligation discussion about how we can assist you with your particular case.

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