Section 111A of ERA is intended to allow employers and employees to speak openly about the possibility of termination of employment without fear of the discussions being referred to in any future court or tribunal action. The only circumstances where the discussions would become admissible in unfair dismissal proceedings would be where the Tribunal considers that anything said or done during the discussions was improper, or connected with improper behaviour. What amounts to improper behaviour is ultimately for the Tribunal to decide, however all forms of harassment, victimisation or discrimination for any protected characteristic would likely be considered to be improper behaviour.
Prior to the introduction of s111A parties had to rely on the "without prejudice" privilege. This was limited in its use for pre-termination negotiations as it is only effective when parties are genuinely attempting to settle a pre-existing dispute. Very often when having this sort of discussion there won't be a pre-existing dispute - for example an employer may want to have a discussion on the basis of the employee's poor performance but without having previously raised the issue of poor performance with the employee. In addition, although the without prejudice privilege prevents the content of settlement discussions being referred to in court or tribunal, it does not always prevent the fact that these discussions took place being referred to. The parties can also agree to waive the without prejudice privilege and on rare occasions it has been found to have been unintentionally waived. Finally, it can also be waived if the court believes that there has been unambiguous impropriety which is similar to the concept of improper behaviour under s111A.
This case involved both constructive dismissal and indirect sex discrimination, arising partly from the Respondent’s conduct towards the Claimant during a period of discussions she had initiated in relation to the termination of her employment. The arguments in this case covered both the s111A privilege and the without prejudice privilege. Both parties had openly referred to the pre-termination discussions in the Tribunal claim and response form. However, the Respondent subsequently objected to reliance on these discussions on the basis that either the s111A privilege applied or, if not, that the discussions had been without prejudice.
The ET ruled that the discussions were, in the main, admissible subject only to redaction of specific references to any offer. The EAT agreed that the without prejudice privilege did not cover the discrimination claim. They also found that by referring to the discussions between the parties in the Tribunal claim and response form both parties had waived the without prejudice privilege.
The key point of this case is in the EAT's conclusion on s111A as it applied to the constructive dismissal claim. They were of the view that the privilege under s111A cannot be waived in the same way as the without prejudice privilege. They also decided that the protection under s111A extends not only to the content of the discussions but also to the fact they took place. In addition, the EAT held that an employer's internal discussions (for example between management) about the protected conversation were protected.
This case confirms how much more useful the s111A privilege is compared to the more limited scope of the without prejudice rule when dealing with pre-termination discussions. It should though be borne in mind that the scope of section 111A is limited to unfair dismissal claims. This means that problems can also arise when a former employee brings additional tribunal claims, such as discrimination. In such circumstances, the settlement discussions may be inadmissible under section 111A in relation to the unfair dismissal claim, but admissible in relation to other claims.