Pre-Termination Discussions with Employees: The Do’s and Don’ts

Jake McManus, Solicitor

Contained within last month’s budget were a number of tax rises for businesses, including the highly publicised increase in employer’s National Insurance Contributions. Just prior to this the Government had announced that it had accepted the Low Pay Commission’s recommendations on increasing the rates of the national minimum wage from 1 April 2025. Following those announcements, there have been increasing reports that  in order to reduce their costs employers may be exploring organisational restructures and considering making redundancies. Claire Treacy has set out our top tips for employer’s planning redundancies here but in our experience, employers often want to consider other options before starting that process.

Protected Conversations

Prior to making redundancies or commencing business restructures, an employer may first want to ‘test the waters’ by speaking with affected employees to explore the idea of bringing their employment to an end within a confidential setting. A pre-termination discussion of this nature is commonly referred to as being a ‘protected conversation’. Essentially it is an off the record conversation with an employee regarding the termination of their employment, with a view to it being terminated on mutually agreed terms. If carried out correctly, the conversation cannot later be relied upon by an employee in any legal proceedings for unfair dismissal, providing a cloak of legal protection.

When might a protected conversation be appropriate?

In some cases, an employer may wish to have a protected conversation if it is considering offering an employee a different role or position within the organisation, for example following a team restructure or more general organisational changes to a business. The discussion could help gauge the employee’s interest in accepting such a move rather than terminating their employment altogether. Protected conversations tend to be more commonly used where redundancies are being considered with a view to avoiding the need to carry out consultations with employees. An employer may also consider inducing pre-termination discussions as an alternative to carrying out a disciplinary or performance procedure for employees with the sufficient qualifying service for claims of unfair dismissal, for whom the business wants to avoid the time, expense and legal risks associated with dismissal.

When engaging in a protected conversation , employers should consider the following tips.

Do

• Explain to the employee the circumstances that have led you to having the conversation.
• Obtain the employee’s agreement to participate in the conversation before you begin any meetings. Make a note of this agreement which can be used as evidence of the employee’s willingness to participate.
• Explain the proposed terms.
• Remind the employee that the conversation must be kept confidential.
• Confirm what the proposed alternative may be but do not give the impression that dismissal is inevitable.
• Obtain legal advice before engaging in a protected conversation. It is important to take extreme care to ensure that the meeting retains its protected status, preventing the employee from relying upon it as evidence in any legal proceedings for unfair dismissal. You should contact Kuits if you intend to engage in a protected conversation, as we can advise you how to pitch the settlement offer and can provide you with a script to follow to ensure that the cloak of legal protection is not undermined.

Don’t

• Subject the employee to any ‘improper behaviour’. The conversation will lose its protected status – and be admissible as evidence in any legal proceedings – if there has been some ‘improper behaviour’ in anything said or done in respect of the pre-termination discussions. What constitutes ‘improper behaviour’ is a matter for an Employment Tribunal judge and will be decided on a case-by-case basis, however it often includes the following:
  • Putting undue pressure on the employee. For example, not giving the employee a reasonable period of time to consider a settlement offer or warning an employee that they will be dismissed if they do not accept the offer.
  • The use of offensive words or aggressive behaviour.
  • Subjecting the employee to any forms of discrimination, harassment, victimisation or bullying and intimidation.

A protected conversation is a double-edged sword: used correctly, it can be highly beneficial for employers and save time and expense. However, should it be handled badly then an employer may find itself on the receiving end of an unfair dismissal and/or discrimination claim with a large bill to foot.

You can find out more about holding a protected conversation on our YouTube channel here

Please contact the Kuits Employment Team on 0161 832 3434 if you would like any assistance with carrying out a protected conversation or any further advice in respect of terminating employment.