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.

1. Resolving Issues
11 March 2014
Kirsty Lewis
Jenna Ide

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. Resolving Disputes
• Without Prejudice
• Pre-termination negotiations
• Mediation
– Private
– Judicial mediation
• ACAS
– Pre-claim conciliation
– Post- claim conciliation
• Settlement Agreements

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. 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. 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. 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. “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. 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. Possible protection
Claims PTNs WP (need
existing dispute)
Unfair dismissal
Automatically UFD X
Breach of contract X
Discrimination X
Risks of using PTNs

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. 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. 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. • 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. • Will it sour the employment relationship?
• What if EE resigns in response to PTNs?
• If EE is accompanied – confidentiality?
Risks of using PTNs

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. • Poor performance
• Potential disciplinary situations
• Potential redundancy situations
• Where EE is not happy in role
• Personality clash
Using PTNs in practice

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. • 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. • 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. 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. 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. 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. 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. 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. Who can do mediation?
• HR
• In-house trained mediator
• Employment law solicitor
• External trained / experienced mediator
(CEDR; ADR; Barristers and Solicitors)
• ACAS
• Judge

27. How?
• Flexible process
• Individual meetings / telephone calls to
start with
• Joint meetings
• Shuttle mediation
• Meetings with or without lawyers
• Adjournments

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Compromising Claims
• Contractual and common law claims –
validly settled if receive valuable
consideration, SA no necessary
• Statutory claims – COT3 or SA

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. 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. 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. 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. 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. 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. 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. Thank you
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