Will protected conversations proposal backfire?

Employers should beware of government plans to introduce ‘protected conversations’ to encourage settlement agreements (also known as compromise agreements).

The initiative is part of the Enterprise and Regulatory Reform Bill, which aims to reduce business red tape.

The aim of protected conversations is to enable employers to consult staff about potential termination or severance packages, without prejudicing subsequent employment tribunal cases for unfair dismissal.

However, the problem with the protected conversations idea is that when you start discussing possible termination terms there is no way back for the employee if a deal can’t be done. Depending on how the situation is handled, the employee could quit and claim constructive dismissal – the very situation the initiative aims to prevent.

Another concern is that protected conversations could lead to employers ending up with disgruntled staff who refuse to sign up to a termination deal and become a management headache. Aware that they are not wanted, these individuals could create problems of relating to sickness absence, downwardly spiralling productivity, and lowering morale among other workers.

In theory, protected conversation might appear tenable, but any shortcomings in the drafting of the legislation could prove costly for employers and employment lawyers have taken a sceptical stance on what has been put before Parliament so far.

As a result of these widespread concerns, the protected conversation initiative may well fail to take off as employers become aware that it represents more of a problem than a solution.

If you would like to discuss this, or any other employment law matter, please contact our Employment team on 01772 258321