Protected Conversations – Stop Waiving the Shield of Privilege
Thursday 15th September 2016
In the recent case of Faithforn Farrell Timms LLP (“FFT”) v Bailey, the Employment Appeal Tribunal has provided guidance on the section 111A “protected conversation” rules.
In circumstances where employers and employees wish to have discussions in order to settle a dispute or agree the terms of departure, there are two main options:
- The “without prejudice” rule – which can potentially apply in all types of litigation in circumstances where there is a dispute between the parties; and
- The “protected conversations” rule (s.111A of the Employment Rights Act 1996) which can only apply in respect of ordinary unfair dismissal claims and there is no requirement for a pre-existing dispute.
If either of these rules apply, then the negotiations can potentially be inadmissible as evidence in any court or tribunal case.
Mrs Bailey worked part time for FFT as an office secretary. At the end of 2014, FFT informed Mrs Bailey that it may no longer require her to continue working her part time hours.
Settlement discussions took place, but were unsuccessful. Consequently, Mrs Bailey complained to the Employment Tribunal alleging sex discrimination and constructive unfair dismissal. Part of the claim related to FFT’s conduct during those settlement discussions.
Mrs Bailey referred to the settlement discussions and without prejudice correspondence within her Claim. FFT did not object and also referred to the discussions in their Defence.
The Employment Tribunal considered the admissibility of the discussions and concluded that section 111A only restricted the detail, not the fact of settlement discussions taking place. Therefore, the documents in issue were not wholly inadmissible.
FFT appealed on the basis that the Employment Tribunal had applied an unduly restrictive views as to the s.111A and “without prejudice” rules. Mrs Bailey cross-appealed and claimed that FFT had waived any privilege that may have existed between the parties.
The EAT concluded that because Parliament had not provided for an exception whereby parties can agree to waive privilege, the parties were unable to do so.
It also concluded that section 111A privilege covers the detail of any discussions and the fact of them taking place.
This is the first appellate decision on “protected conversations”. It has provided useful guidance on the application of section 111A and the difference between it and the common law “without prejudice” rules – where privilege can be waived.
In terms of the day-to-day management of disputes from an HR perspective, this is an important case. Sometimes an employer might want to waive section 111A privilege and the fact that it can’t has the potential to lead to gaps in open dialogue with employees.
For example, in a situation where an employee is accused of misconduct and protected conversations are taking place, it may be that those discussions take time and then the negotiations are unsuccessful. A Tribunal could subsequently question why there was a delay in the employer taking any formal action, such as a suspension or commencing an investigation, and the employer would be unable to use any “protected conversation” as an explanation for this delay.
So, when a potential dispute arises and the shield of protected conversations is being used, it is important to consider whether it is also appropriate to continue with open dialogue on the record at the same time.