In Gallagher v McKinnon Auto and Tyres, the Employment Appeal Tribunal (“EAT”) upheld the tribunal’s decision that pre-termination negotiations between the Claimant and the Respondent were inadmissible in his unfair dismissal claim.

Under s111A of the Employment Rights Act 1996, pre-termination discussions, known as ‘protected conversations’, are inadmissible in ordinary unfair dismissal claims if conducted without ‘improper behaviour’, allowing confidential conversations about mutually agreed employment termination terms, even without a prior dispute. The is supported by an ACAS Code. 

In the facts of the case, the Claimant worked as a branch manager and was absent due to illness. Upon his return, the Respondent decided his position was no longer needed and proposed a redundancy process. At a meeting stated to be ‘off-the-record’, the Claimant was offered a settlement agreement and given 48 hours to respond, with the indication that redundancy would follow if he declined. The Claimant refused and was subsequently dismissed for redundancy. He claimed unfair dismissal and attempted to use the settlement discussions in evidence. The tribunal ruled these discussions were protected pre-termination negotiations, and since there was no improper behaviour, they were inadmissible. 

The Claimant appealed to the EAT, arguing that the tribunal’s decision in this regard was unreasonable. He argued there was improper behaviour as:

1. He was told the meeting was a ‘return to work’ meeting and was taken by surprise;

2. He was only given 48 hours to consider the offer; and

3. He was told he would be made redundant if the offer was not accepted. 

The EAT, dismissing the appeal, held that the first two reasons did not represent improper behaviour in the circumstances. In respect of third, the EAT held that it was important to distinguish redundancy situations from disciplinary situations. The ACAS Code does state that a form of undue pressure can be telling an employee that, if they do not accept the offer, they will be dismissed.

However, this guidance specifically refers to a disciplinary situation. In this case, a redundancy situation had arisen. It was accepted that the Respondent had told the Claimant that his role was redundant. However, this did not mean that dismissal was inevitable as there were still the possibility of alternative employment. 

Lessons for Employers

Despite the result, the case was finely balanced. It is important for employers to ensure employees are not misled about the reasons for meetings they are invited to. Employers should approach these discussions in a calm manner, conducting any conversations in good faith and maintain constructive conversations throughout.

If you would like more information, please contact Arvin Sandhu by email or on 01494 521301.