Resolving Issues

11 March 2014

Kirsty Lewis

Jenna Ide

Who are we?

• Kirsty Lewis, Employment Law Partner

• Jenna Ide, Employment Law Solicitor • We specialise exclusively in:

– Employment law

– HR support

– Workplace Mediation

– Training

Resolving Disputes

• Without Prejudice

• Pre-termination negotiations

• Mediation

– Private

– Judicial mediation

• ACAS

– Pre-claim conciliation

– Post- claim conciliation

• Settlement Agreements

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

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

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

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)

“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

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

Possible protection

Claims PTNs WP (need

existing dispute)

Unfair dismissal

Automatically UFD X

Breach of contract X

Discrimination X

Risks of using PTNs

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

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

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

• 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

• Will it sour the employment relationship?

• What if EE resigns in response to PTNs?

• If EE is accompanied – confidentiality?

Risks of using PTNs

• 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

• Poor performance

• Potential disciplinary situations

• Potential redundancy situations

• Where EE is not happy in role

• Personality clash

Using PTNs in practice

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

• 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

• 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

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?

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

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

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

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

Who can do mediation?

• HR

• In-house trained mediator

• Employment law solicitor

• External trained / experienced mediator

(CEDR; ADR; Barristers and Solicitors)

• ACAS

• Judge

How?

• Flexible process

• Individual meetings / telephone calls to

start with

• Joint meetings

• Shuttle mediation

• Meetings with or without lawyers

• Adjournments

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

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?

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

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

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

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.

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

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

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

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

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

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

Compromising Claims

• Contractual and common law claims –

validly settled if receive valuable

consideration, SA no necessary

• Statutory claims – COT3 or SA

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

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

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

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

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

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

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?

Thank you

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