TPP HR Seminar Mar 2014 - Resolving Issues


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Over the last few years, much has changed in legislation and case law regarding making offers to settle and how to settle potential claims. Are you sure of the correct and legal approach to making settlement offers? Are you confident in having pre-termination conversations? In light of the case law, are you up to date with the interpretation of the settlement agreement clauses? Is mediation an alternative?

This seminar is aimed at HR professionals involved in resolving disputes, to give you the confidence to identify the best way to make a settlement offer, the correct procedures to follow, the right words to use and how the Settlement Agreement terms would be interpreted in light of case law.

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TPP HR Seminar Mar 2014 - Resolving Issues

  1. 1. Resolving Issues 11 March 2014 Kirsty Lewis Jenna Ide
  2. 2. Who are we? • Kirsty Lewis, Employment Law Partner • Jenna Ide, Employment Law Solicitor • We specialise exclusively in: – Employment law – HR support – Workplace Mediation – Training
  3. 3. Resolving Disputes • Without Prejudice • Pre-termination negotiations • Mediation – Private – Judicial mediation • ACAS – Pre-claim conciliation – Post- claim conciliation • Settlement Agreements
  4. 4. Protected Conversations 1) Without Prejudice Rule • Common law principle 2) “Pre-termination negotiations” – PTNs • s. 111A Employment Rights Act 1996; and • ACAS Code of Practice on Settlement Agreements plus ACAS guidance
  5. 5. Recap – without prejudice rule • Need a genuine attempt at settlement • Need existing dispute • Substance is crucial • Exception: “unambiguous impropriety” – construed narrowly - e.g. blackmail, perjury, discriminatory comments
  6. 6. WP: What is “Existing Dispute”? • Not straightforward / highly fact specific • Grievances – not necessarily • Threat or contemplation of litigation - likely yes • Litigation commenced - yes This is where “pre-termination negotiations” become useful as with PTNs there is no need for an existing dispute
  7. 7. Pre-termination negotiations Requirements: • Before termination of employment • An offer made or discussions are held… • …with a view to the employment being terminated on terms agreed between ER and EE • If the above applies, evidence of PTNs is inadmissible in any claim for ordinary unfair dismissal (unless improper behaviour)
  8. 8. “Existing dispute” starts WP Termination PTNs Can be used if no existing dispute Need an “existing dispute” PTNs are of no use after termination Can’t rely on WP where no “existing dispute” Interplay b/n WP and PTNs
  9. 9. ACAS Code of Practice: • EE should be given reasonable period of time to consider proposed SA. • Minimum 10 calendar days to consider SA and to receive independent legal advice • ER should allow EE to be accompanied Pre-termination Negotiations
  10. 10. Possible protection Claims PTNs WP (need existing dispute) Unfair dismissal Automatically UFD X Breach of contract X Discrimination X Risks of using PTNs
  11. 11. If ER says or does anything which an ET regards as 1) “improper behaviour”; or 2) connected with “improper behaviour” then the protection will only apply to the extent that the ET considers it just. Risks of using PTNs
  12. 12. Examples in ACAS Code: • Harassment, bullying and intimidation • Physical assault/threat of physical assault • Victimisation/discrimination • Putting undue pressure on a party Not exhaustive leaving grey area Improper behaviour
  13. 13. Putting undue pressure on a party • Not giving a reasonable period of time to consider an offer (minimum of 10 calendar days) • Where possible disciplinary action, ER says EE will be dismissed if SA rejected Improper behaviour
  14. 14. • Factually stating alternatives • Factually stating if SA is rejected and disciplinary action results in dismissal then EE may not be able to leave on same terms • “Encouraging an EE, in a non- threatening way, to reconsider a refusal of a proposal” Not Improper behaviour
  15. 15. • Will it sour the employment relationship? • What if EE resigns in response to PTNs? • If EE is accompanied – confidentiality? Risks of using PTNs
  16. 16. • Attempted informal resolution of issue? • Is there a risk of claims other than UFD? Yes: does WP apply? No: proceed? (carefully!) • Considered implications to employment relationship / wider workforce if settlement not reached? • Proposed settlement agreement best way forward? Mediation? Checklist
  17. 17. • Poor performance • Potential disciplinary situations • Potential redundancy situations • Where EE is not happy in role • Personality clash Using PTNs in practice
  18. 18. E.g. Poor performance • ER explains to EE the concerns about performance • ER presents 2 options: 1) performance procedure (explain); or 2) exploration of whether they can agree on an exit on the basis of settlement package Holding a PTN meeting
  19. 19. • If EE agrees to explore settlement, ER should put forward written terms • ER must give EE a “reasonable period” in which to consider the offer • Is EE interested? Yes: supply SA, allow EE to seek legal advice No: back off immediately and start proper performance procedure Holding a PTN meeting
  20. 20. • Still need to be careful • PTNs not as useful as might have hoped • ER may prefer to fall back on WP rule – “existing dispute” becomes relevant • Lack of case law on this topic due to high volume of successful settlements? Summary – WP / PTNs
  21. 21. Mediation - What do you think? • What is mediation? • Who can do it? • When is it best to use it? • What are the benefits of mediation? • How much does it cost?
  22. 22. Benefits vs Risks Potential Benefits • Quicker • Cheaper • More flexible • Less stress for all • Focus on future rather than past • Gets results a court cannot give • Can explore more than the legal side e.g. emotions / personal elements • Allows insight into behaviour • Allows employment to continue / repair relationships Potential Risks • Can all go wrong if using someone inexperienced • Could the contents of mediation be used in litigation? • No guarantees it will work • Could be costly if it does not work • May not be appropriate if formal investigation is required
  23. 23. Different stages in a dispute – When to do mediation? • Trigger / event • Dispute arises • Tension • Deadlock • Complaints made • Complaints investigated • Complaints decided • Dissatisfaction with decision • Tribunal or court claim made
  24. 24. Workplace Mediation • Employment is continuing and a conflict is affecting productivity and relationships need to be repaired so further disputes do not arise – Informal workplace mediation – Formal workplace mediation
  25. 25. Litigation Mediation • A conflict or dispute has reached the point of likely litigation or litigation has begun – Pre – claim conciliation ACAS – Within –claim conciliation ACAS – Judicial mediation (usually for at least 3 day hearings) – Employment dispute mediation
  26. 26. Who can do mediation? • HR • In-house trained mediator • Employment law solicitor • External trained / experienced mediator (CEDR; ADR; Barristers and Solicitors) • ACAS • Judge
  27. 27. How? • Flexible process • Individual meetings / telephone calls to start with • Joint meetings • Shuttle mediation • Meetings with or without lawyers • Adjournments
  28. 28. Examples of outcomes of Mediation • An agreement to change behaviour • An agreement re: roles/responsbilities • Adjustment to work conditions • A managed appraisal process • A mentoring programme • Agreements re: communication methods • Recognition of differing perspectives • Settlement
  29. 29. Questions to ask when considering Mediation • What is the desired outcome? • What are the organisations priorities? • Costs analysis • Personalities of those involved • Willingness of parties to take part? • Timings • What are the alternatives?
  30. 30. ACAS – mandatory pre-claim conciliation • Imposing a duty on parties to prospective claims to attempt conciliation before tribunal claim is issued • Available from 6 April 2014 • Transitional period form 6 April to 5 May • Mandatory for claims presented on or after 5 May
  31. 31. PCC – what claims are covered • Most are covered • Some exemptions – Failure of seller to provide employee liability information – Payments out of the National Insurance Fund – Declaration Collective Agreement is void – Appeal against ‘unlawful act’ notice issued by EHRC or HSE
  32. 32. PCC – When it is not required • Group action where another person has complied • Multiple claims containing an exemption • The Respondent has contacted ACAS to attempt to resolve • Claims against some government / secret security bodies
  33. 33. ACAS – mandatory pre-claim conciliation • Step 1 – Prospective Claimant must send prescribed information to ACAS • Step 2 – ACAS makes reasonable attempts to contact with Prospective Claimant by close of business following day and asks if they wish to proceed.
  34. 34. ACAS – mandatory pre-claim conciliation • Step 3 – If, Prospective Claimant wishes to engage in settlement discussions, ACAS attempts to settle • including reinstatement or re-engagment • within prescribed period - one month which can be extended by 2 weeks – If Prospective Claimant does not wish to engage in discussions, ACAS issues certificate
  35. 35. ACAS – mandatory pre-claim conciliation • Step 4 – ACAS issues certificate (usually by email) – Prospective Claimant or Respondent cannot be reached – Prospective Claimant does not wish attempt to settle – At any point ACAS concludes that settlement is not possible – A party withdraws during negotiations – Prescribed period expires (one month or further two weeks if extended) – Only part of a dispute has been settled
  36. 36. ACAS – mandatory pre-claim conciliation • Step 5 – Prospective Claimant can issue claim and must quote the certificate number or face rejection – Extension of time to issue proceedings: – Clock is stopped until certificate issued unless Step 1 invoked within last month of deadline and then new deadline is one month after certificate
  37. 37. Respondent requests PCC • Step 1 - Respondent contacts ACAS with details of Prospective Claimant (request form will be online) • Step 2 – case referred to conciliation officer (c.f. PCC officer) who attempts to settle • Step 3 – if no settlement, conciliation officer issues a certificate
  38. 38. Respondent requests PCC • Step 4 – Prospective Claimant can bring a claim – but must do so within ordinary time limit – Prospective Claimant could then invoke the mandatory PCC in order to gain more time to issue
  39. 39. After claim issued • ACAS can conciliate if – The Claimant and Respondent request it – In the absence of a request, Conciliator considers there is reasonable prospects of settlement
  40. 40. Compromising Claims • Contractual and common law claims – validly settled if receive valuable consideration, SA no necessary • Statutory claims – COT3 or SA
  41. 41. SA - Personal Injury claims • PI claims in the courts – get a draft consent order • PI claims, employee is aware of but not brought – Clear and unambiguous wording in SA • PI claims, employee is not aware of – Clear and unambiguous wording in SA • PI claims that have not yet arisen – No contravenes UCTA • PI claims as a result of discrimination – Under SA
  42. 42. SA - Pension claims • Not possible to waive except in limited circumstances – Rights against Trustees of pension not affected if not named as beneficiary under SA – Not usually possible to waive unless existing dispute
  43. 43. SA - Future Claims that have not yet arisen • Potentially possible – Clear and unambiguous wording in SA – No room for doubt – No evidence in case law of what wording is likely to work
  44. 44. SA – all claims • Must relate to either – ‘particular complaint’ – ‘particular proceedings’ • Particular complaint/proceedings must be identified – Hinton – not good practice for list of every claim know under employment law but needs to be specfic – Warranty confirming claims listed are only claims – Indeminfy if employee breaches agreement
  45. 45. SA – Without Prejudice and Subject to Contract • Without Prejudice – inadmissible in court (see above) • Subject to Contract – neither party is legally bound by anything ‘agreed’ in negotiations – legally binding on signature of all parties only
  46. 46. SA v COT3 SA • Must comply with the conditions • NOT – Collective redundancy claims for failure to inform and consult – TUPE claims for failure to consult; protective awards; employee liability info – Agency Worker Regulations – Statutory payments COT3 • Claims that could be brought in tribunal only • Can cover claims not covered by SA • NOT PI claims • Quicker • Cheaper • No need for legal advice
  47. 47. Summary of considerations • Nature of dispute (legal v personal) • What stage of the dispute are you? • Value of the employee • Personality of the employee • What is the ideal outcome? • Time limits involved • Costs involved • Claims want to settle • What message do you need to send to other employees?
  48. 48. Thank you FEEDBACK FORMS