If your employer has asked to speak with you ‘off the record’ about the possibility of leaving your job on agreed terms, they may be initiating what is legally known as a protected conversation. Understanding what this means — and what protections it gives your employer, and what it does not — is helpful before you respond.
Protected conversations are closely related to, but legally distinct from, the without prejudice rule. This article explains how the regime works, what the case law tells us about its limits, and what your rights are as an employee if your employer initiates one.
The Legal Basis: Section 111A of the Employment Rights Act 1996
The protected conversation regime was introduced by Parliament in 2013 through the insertion of section 111A into the Employment Rights Act 1996 (‘ERA’). It operates across Great Britain and was designed to allow employers (and employees) to raise the possibility of an agreed exit — under a settlement agreement — without that conversation being used against them as evidence in a subsequent ordinary unfair dismissal claim.
The key provision is at section 111A(1), which states that evidence of ‘pre-termination negotiations’ is inadmissible in any proceedings on a complaint of unfair dismissal. ‘Pre-termination negotiations’ are defined at section 111A(2) as any offer made or discussions held before the termination of employment, with a view to it being terminated on terms agreed between employer and employee.
In plain English: if your employer raises a settlement proposal with you in a protected conversation, and you later bring an ordinary unfair dismissal claim, neither side can refer to what was said in that conversation as evidence. This is subject to protection not being lost by bad behaviour as we explain below.
How Is a Protected Conversation Different from ‘Without Prejudice’?
This is one of the most commonly misunderstood aspects of the law in this area. The two regimes serve similar purposes but operate differently.
The without prejudice rule requires an existing legal dispute before it can apply. A protected conversation under section 111A does not. As the Employment Appeal Tribunal explained in
Gallagher v McKinnon’s Auto and Tyres Ltd [2024] EAT 174 (para 5):
“When no legal dispute has arisen, the without prejudice principle has no application. Employers and employees… may therefore be cautious about initiating a conversation that could lead to a parting of the ways, if the things they do and say might later be used against them in legal proceedings. To address this concern, Parliament amended the Employment Rights Act 1996 in 2013 to introduce a mechanism… to facilitate confidential discussions held with a view to reaching agreement about terms of severance.”
This means that your employer can approach you about a settlement even before any formal dispute has arisen — for example, at an early stage of a performance management process, or simply because they want to restructure or are contemplating your role may become redundant. The conversation is protected from the outset, provided the conditions are met.
What the Protection Covers: Fact AND Content
One aspect of section 111A that often surprises people is its breadth. The protection does not merely cover what was said in a protected conversation — it extends to the fact that the conversation took place at all.
This was established in the leading case of Faithorn Farrell Timms LLP v Bailey [2016] IRLR 839, where HHJ Eady QC held (at para 40):
“What is rendered inadmissible is… evidence of any offer made or discussions held with a view to terminating the employment on agreed terms and, on my reading of the section, that must extend to the fact of the discussions, not simply to their content.”
This was confirmed by the EAT in Gallagher [2024] EAT 174 (para 6) and in Basra v BJSS Ltd [2017] UKEAT/0090/17, where the practical consequence of this in claims involving multiple causes of action was identified as “analytical compartmentalisation”: the same evidence may be inadmissible for the unfair dismissal claim but admissible for other claims running alongside it (para 26(c)).
A Critical Limit: The Protection Cannot Be Waived
Unlike the without prejudice rule — which the parties can agree to waive — the protection under section 111A cannot be waived by agreement. This was one of the most important findings in Faithorn (para 45), where HHJ Eady QC held that Parliament, having provided for specific exceptions within s.111A, had chosen not to include party agreement as one of them. The general prohibition on contracting out in section 203 ERA reinforces this.
The practical significance of this was illustrated in Basra v BJSS Ltd [2017] UKEAT/0090/17. In that case, both parties had agreed that the without prejudice communications should be placed before the tribunal. The tribunal nevertheless excluded them under s.111A. The EAT held (para 26(a)) that the tribunal was right to do so in principle, and that the protection could not be waived regardless of the parties’ wishes.
A Critical Limit: The Protection Only Covers Unfair Dismissal
The protection under section 111A applies only to complaints of ordinary unfair dismissal under section 111 ERA. It does not protect pre-termination negotiations from being used as evidence in other types of claim.
This point was made clearly in Faithorn (para 38) and confirmed in Basra (para 26). In Lingard v Leading Learners Multi Academy Trust [2017] Case No. 2401985/17, Employment Judge Ross applied this directly. The claimant brought claims for both unfair dismissal and disability discrimination. The tribunal held (para 48):
“The claimant does not just bring a claim for constructive unfair dismissal. She also brings a claim for disability discrimination. In these circumstances Section 111A does not apply because it relates to unfair dismissal claims only.”
This is an important point for employees who have both an unfair dismissal claim and a discrimination claim. Evidence from a protected conversation that cannot be used for the unfair dismissal element of the case may still be admissible in relation to the discrimination claim.
Section 111A(3) also expressly excludes automatically unfair dismissal claims — for example, dismissal for whistleblowing, for asserting a statutory right, or for trade union activities.
When Does Section 111A Apply? The Date of Termination Problem
Section 111A only applies to negotiations that took place before the termination of employment. This creates a practical problem where the date of termination is itself disputed.
This issue was examined in detail in Basra v BJSS Ltd [2017] UKEAT/0090/17. In that case, the employer sent a without prejudice offer on 1 March 2016 and the employee responded on 3 March purporting to accept it. The employer argued this amounted to a resignation or agreed termination on 3 March; the employee argued his employment continued until 15 March. The tribunal applied s.111A and excluded the offer letter before determining which date was correct. The EAT held this was an error (paras 34–40).
Choudhury J held (at paras 34–36):
“Where there is a dispute as to whether or not the contract was terminated on a particular date, the Tribunal would not be in a position to say what evidence should be excluded until that dispute is determined… The proper approach… is to determine, as a preliminary question, when the contract was terminated. In doing so, the Tribunal must consider all the evidence relevant to that issue.”
The principle is straightforward: you cannot apply section 111A to exclude evidence before you know when the employment ended, because that is the very fact the evidence may be needed to determine.
Improper Behaviour: When the Protection Can Be Lost
The protection under section 111A is not absolute. Section 111A(4) provides that where anything said or done during pre-termination negotiations was, in the tribunal’s opinion, improper or connected with improper behaviour, the protection applies only to the extent the tribunal considers just.
The ACAS Code of Practice on Settlement Agreements gives examples of improper behaviour (at paragraphs 17–19). These include:
- Harassment, bullying, intimidation or aggressive behaviour
- All forms of victimisation
- Discrimination on any protected characteristic
- Putting undue pressure on a party — including not giving reasonable time to consider the offer, or telling an employee they will be dismissed if they reject it before any disciplinary process has begun
Importantly, as the EAT confirmed in Faithorn (para 48) and in Gallagher [2024] EAT 174 (para 13), the impropriety test under s.111A(4) has wider application than the ‘unambiguous impropriety’ exception to the without prejudice rule. Lower-level improper behaviour can be sufficient to strip the statutory protection, even if it would not meet the high threshold required to remove without prejudice privilege.
What counts as improper behaviour? Lessons from the cases
In Lingard v Leading Learners [2017], the employer’s CEO made a settlement offer to the employee’s trade union representative after a welfare meeting, without any prior arrangement and without the employee’s authority to discuss settlement. The tribunal found (paras 50–54) that this amounted to improper behaviour within the wide definition in the ACAS Code, and that the conversation was not protected.
In Gallagher v McKinnon’s Auto and Tyres Ltd [2024] EAT 174, by contrast, the EAT dismissed all three of the employee’s impropriety arguments and upheld the protection. The key findings were:
- On being told redundancy would follow rejection of the offer: The ET had found the employer told the claimant a redundancy process would commence, not that dismissal was inevitable. This was not impropriety. The EAT noted (para 33) that paragraph 18(e)(ii) of the ACAS Code is framed in the context of disciplinary processes, not redundancy, and the two are legally and practically different.
- On the meeting being set up under misleading pretences: The employer had described the meeting as a return-to-work discussion when it intended to raise settlement. The ET found this was not fair, but not improper. The EAT upheld this (paras 34–37), noting the judge had balanced the surprise element against the calm conduct of the meeting and the claimant’s ability to discuss matters with family afterwards.
- On the 48-hour deadline to respond: The EAT held (paras 38–41) that the ACAS Code’s minimum 10-day period applies to the formal written terms of a settlement agreement. A verbal offer is different. 48 hours to respond to a verbal offer was not, on the facts, improper.
The Gallagher judgment is a useful reminder that tribunals assess impropriety in the round, looking at all the circumstances cumulatively rather than treating each element in isolation (para 43). The claimant had argued the three factors together amounted to impropriety; the EAT rejected this.
Tip: Employees in a pressurised stressful situation might be forgiven for thinking they are being told they will be made redundant even when the language is not that, but something along the lines of we will start the redundancy consultation process. Following up these conversations in writing can go some way to help communicate more effectively what has been said.
The Employee’s Position: Practical Implications
For employees who find themselves on the receiving end of a protected conversation, several practical points flow from the case law:
- You cannot be forced to accept. A protected conversation does not create any obligation on you to agree to anything. You are entitled to take time, seek advice, and negotiate.
- The conversation cannot be used against your employer in most unfair dismissal cases. If negotiations break down and you bring an ordinary unfair dismissal claim, what was said in the conversation will not generally be admissible. This cuts both ways: you also cannot usually rely on it to support your claim.
- If you have claims such as a discrimination claim, the position is different. Evidence from a protected conversation may be admissible in relation to those claims even if it is excluded for the unfair dismissal claim. If you believe the way the conversation was conducted involved discrimination — for example, because it followed a period of pregnancy-related absence — this is important. But the without prejudice rule might apply and make the communications inadmissible for all claims not just unfair dismissal.
- Improper behaviour strips the protection. If your employer behaves improperly during the conversation — bullies you, fails to give you reasonable time, or puts you under undue pressure — the tribunal has discretion to admit the evidence. Keep a contemporaneous record of what happened and seek advice promptly.
- You are entitled to be given time. The ACAS Code recommends a minimum of 10 calendar days to consider the formal written terms. Being given significantly less time than this without good reason may support an argument of improper behaviour.
Key Takeaways
- A protected conversation under section 111A ERA 1996 allows an employer to raise settlement discussions without those discussions being used as evidence in an unfair dismissal claim
- The protection covers both the fact that a conversation took place and its content.
- Unlike without prejudice privilege, section 111A protection cannot be waived by agreement between the parties.
- The protection does not apply to discrimination claims or automatically unfair dismissal claims — only to ordinary unfair dismissal under section 111 ERA
- Where the date of termination is disputed, the tribunal must determine that date before applying s.111A.
- Where the employer behaves improperly during negotiations, the tribunal has discretion to admit the evidence — the test is broader than the ‘unambiguous impropriety’ standard applicable to without prejudice communications
- What counts as improper depends on all the circumstances: the ACAS Code provides guidance but tribunals assess the position in the round.
- Perhaps most importantly, all of this is only relevant to whether the communications can be used in any subsequent ordinary unfair dismissal claim. Most negotiations do end is a deal, so admissibility becomes an irrelevance. Distractions and hostility about admissibility might not always help you, or your employer, to agree something sensible, and they can result in a hardening of positions. Think commercially, if your goal is to agree a settlement on best terms.
Received an approach from your employer about leaving on agreed terms? Read our guides on what a settlement agreement includes, how much you should be paid, and what ‘without prejudice’ means for practical guidance on your next steps.
Legal Disclaimer:
This article is for general information purposes only and does not amount to (nor is it intended to be) legal, tax or financial advice or a complete or authoritative statement of the law nor should they be treated as such. No warranty or promise is given, express or implied, as to accuracy of the information on this page and no liability is accepted for any error or omission. You should instruct a specialist employment solicitor to advise you on your particular situation without delay and not act or rely on the information on this page.