Tue 30 Jan 2018

Termination date loophole may leave protected conversations unprotected

When it was brought into force section 111A of the Employment Rights Act 1996 was heralded as a significant change to the law which would allow employers and employees to engage in pre termination negotiations without fear of the discussions subsequently being divulged before an employment tribunal. 

However, since then a number of cases have considered in what circumstances that exclusion of evidence would not apply.  The latest of these cases is Basra v BJSS Ltd.

Section 111A(2) defines pre-termination negotiations as "any offer made or discussions held, before the termination of employment in question, with a view to it being terminated on terms agreed between the employer and the employee".  

In Basra, the EAT considered whether an employment tribunal was correct to exclude evidence of pre termination negotiations under section 111A when the effective date of termination was in dispute.  Mr Basra had worked for BJSS Ltd for approximately 2 ½ years when customer complaints led BJSS to have concerns about his performance.  At a meeting on 29 February 2016 to discuss the matter Mr Basra offered to resign, though he had not been put under any pressure to do so.  On 1 March BJSS sent two letters to Mr Basra, one inviting him to a disciplinary hearing and the other offering 3 months' salary in return for immediate termination of employment under a settlement agreement.

On 3 March Mr Basra responded by email disputing BJSS's version of events but accepting the offer.  The letter stated that 3 March would be his last day of work at BJSS.  However, Mr Basra did not sign the settlement agreement and instead instructed solicitors who advised BJSS that he had been signed off with stress and would not be attending the disciplinary hearing.  BJSS responded on 15 March stating that Mr Basra's employment had terminated by agreement on 3 March.  Mr Basra subsequently made an unfair dismissal claim alleging he had been dismissed on 15 March while BJSS maintained their position that the employment terminated on 3 March by agreement.

The Employment Tribunal found that the email of 3 March amounted to a resignation, that Mr Basra had not been dismissed and therefore his claim failed.  The Tribunal took into account the terms of the email but it did not take into account the terms of the offer made on 1 March as they considered that to be part of the pre-termination negotiations excluded by section 111A.   Mr Basra appealed.

The EAT found that the Tribunal had erred in disregarding evidence of negotiations prior to 3 March when it was not clear when the effective date of termination was.  If it turned out to be 15 March then the terms of the email should also have been excluded under section 111A.   It was also not possible for the Tribunal to conclude that the email on 3 March was an unambiguous resignation without having considered the terms of the offer of 1 March that it responded to. 

This is a case where the cart was put before the horse.  Without being certain of the effective date of termination the Tribunal could not work out which discussions were before the termination date (and therefore inadmissible) and which were not.  Where this date is in dispute both parties need to be aware that evidence may be allowed on matters which, at the time the discussions took place, they may have thought would not be admissible in a Tribunal.

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