A protected conversation with employee can allow an employer to discuss a possible settlement agreement, but it must be handled carefully.
Employers sometimes want to speak openly with an employee about ending the employment relationship on agreed terms. This may happen where there are performance concerns, workplace conflict, absence issues, a damaged working relationship or a possible redundancy situation.
A protected conversation can be useful, but it is not risk-free. The employer should understand when protection may apply, when it may not apply, and how to approach the discussion professionally.
What is a protected conversation with employee?
A protected conversation with employee is usually a confidential discussion about a possible settlement agreement. The aim is to explore whether the employment relationship can end, or a dispute can be resolved, on agreed terms.
These discussions are sometimes called protected conversations because, in certain circumstances, they cannot be referred to as evidence in an ordinary unfair dismissal claim.
However, the phrase should not give employers false confidence. Protection is not unlimited. A conversation may still be referred to in some types of claim, and protection can be lost if the employer behaves improperly.
When might employers use a protected conversation with employee?
Employers may consider a protected conversation where they want to explore a clean and agreed exit without going through a longer formal process.
Common situations include:
- ongoing performance concerns
- relationship breakdown
- repeated workplace conflict
- possible redundancy or restructure
- absence or capability concerns
- a grievance or dispute that may be difficult to resolve
- commercial reasons for seeking an agreed departure
Employers should not use a protected conversation as a way to avoid proper procedures where those procedures are needed. It should be used carefully and usually after the employer has considered the facts, documents and risks.
When a protected conversation with employee may not be safe
A protected conversation with employee will not protect the employer in every situation. The protection under section 111A of the Employment Rights Act 1996 mainly relates to ordinary unfair dismissal claims.
It does not necessarily protect the employer in other claims, such as discrimination, whistleblowing, automatic unfair dismissal, breach of contract or unlawful deduction from wages.
This matters because workplace disputes often involve more than one possible claim. For example, a performance issue may involve disability concerns. An absence issue may involve pregnancy, disability or health-related matters. A grievance may include discrimination allegations.
If the employer wrongly assumes the conversation is fully protected, it may say something that later becomes damaging evidence.
Prepare before starting a protected conversation with employee
Preparation is important. The employer should not arrange a protected conversation without first understanding the background and the potential risks.
Before the meeting, employers should consider:
- why settlement is being considered
- what formal process, if any, is already underway
- whether there are discrimination or whistleblowing risks
- what documents support the employer’s position
- what payment or terms may be offered
- whether the employee is likely to feel pressured
- who should lead the discussion
The employer should also decide whether the discussion will be face to face, by video call or in writing. Sensitive conversations are often better handled by someone senior, calm and properly briefed.
How to open a protected conversation with employee
The employer should be clear and professional. It should explain that the purpose of the meeting is to explore a possible settlement agreement and that the employee does not have to agree.
The employer should avoid threatening language. It should not say or imply that dismissal is inevitable if the employee refuses the offer, unless that is a fair and properly considered outcome following an appropriate process.
The discussion should usually cover:
- the reason settlement is being raised
- the proposed financial terms
- any notice, holiday pay or other sums owed
- whether employment would end and when
- confidentiality expectations
- the need for the employee to take independent legal advice
- the time allowed to consider the proposal
Employers should keep the tone measured. A protected conversation is not a disciplinary hearing and should not become an argument.
Improper behaviour during a protected conversation
Protection may be lost if there is improper behaviour. Employers should avoid pressure, threats, intimidation, discrimination, harassment or misleading statements.
Examples of risky behaviour include telling the employee they will definitely be dismissed if they do not accept, giving an unreasonably short deadline, refusing to let them consider the proposal properly, or using the conversation to bully them into leaving.
The employer should give the employee reasonable time to consider the offer. ACAS guidance commonly refers to a minimum period of 10 calendar days to consider the written terms of a settlement agreement unless the parties agree otherwise.
Putting the protected conversation proposal in writing
If the employer wants to make a formal settlement proposal, it should usually be confirmed in writing. The letter should be clear, accurate and consistent with what was discussed.
The written proposal should usually explain:
- that settlement is being proposed
- the proposed termination date, if relevant
- the proposed payment terms
- how salary, notice and holiday pay will be handled
- any confidentiality wording
- the need for independent legal advice
- the deadline for response
Employers should avoid overpromising or using vague language. Any final settlement agreement should be properly drafted so the intended claims are dealt with correctly.
Protected conversations and settlement agreements
A protected conversation often leads to a settlement agreement, but the conversation itself is not the agreement.
For a settlement agreement to be valid, the employee must usually receive independent legal advice and the agreement must meet legal requirements. Employers should not assume that a verbal agreement in a meeting is enough.
The settlement agreement should cover the claims being settled, the payments being made, the termination arrangements and any confidentiality, reference or announcement wording.
For practical help with this process, employers can get support with settlement agreement discussions.
Practical checklist for employers
Before holding a protected conversation, employers should ask:
- Is this the right situation for a protected conversation?
- Could there be discrimination, whistleblowing or automatic unfair dismissal risks?
- Have the facts and documents been reviewed?
- Is the proposed offer realistic?
- Who should lead the discussion?
- Will the employee have reasonable time to consider the offer?
- Is the written proposal clear and accurate?
- Should legal advice be taken before the meeting?
Getting protected conversations right
A protected conversation with employee can be a useful way to explore settlement, but it should not be treated as a shortcut or a guarantee of protection.
Employers should prepare carefully, use fair wording and avoid pressure. They should also understand that some claims may fall outside the protection.
Employers Law helps employers manage protected conversations, settlement agreement discussions and workplace disputes. If you are considering an agreed exit or settlement proposal, early advice can help reduce the risk of mistakes.
For practical help with settlement discussions, visit our settlement agreement discussions page. For wider support, Employers Law also provides free employment law advice for employers across a full range of workplace issues.