Applying exceptions to the confidentiality of pre termination negotiations

The Employment Appeal Tribunal (‘EAT’) has provided guidance on applying the exceptions to the confidentiality of pre termination negotiations and confirmed that they should be considered if the facts of the case suggest they apply.

The law 

Section 111A of the Employment Rights Act 1996 (‘ERA’) allows for confidential conversations between an employer and employee regarding terminating the employees employment, known as pre-termination negotiations or protected conversations. Evidence of any offers made or discussions held are inadmissible in legal proceedings unless the exceptions in s.111A ERA apply.

S.111A(4) provides an exception to the inadmissibility of pre termination discussions if anything said or done is improper, or connected with improper behaviour. If this is the case, the tribunal will then go on to consider whether it is just and equitable to protect the conversation. There is no statutory definition of improper behaviour. However the Acas Guide on Settlement Agreements does provide examples such as, harassment, bullying, discrimination, victimisation and physical assault.

Protection also only applies in ordinary unfair dismissal cases and s.111A(3) also specifically excludes protection for cases relating to automatically unfair dismissal, such as dismissal due to whistleblowing, pregnancy or for requesting flexible working.

The purpose of protecting pre-termination negotiations is to encourage a settlement between the employer and employee and therefore to avoid legal proceedings.

Harrison v Aryma Ltd - The facts 

The Claimant tried to rely on a letter from the Respondent which cited performance issues and proposed termination using a settlement agreement. Following a failure in negotiations, the Claimant resigned and claimed constructive unfair dismissal and discrimination on the basis of her pregnancy. The Respondent argued that their letter was protected under s.111A ERA and therefore inadmissible.

At a preliminary hearing, the Claimant amended her claim and argued that s.111A(3) applied as her dismissal was automatically unfair as it was due to pregnancy and that the letter amounted to improper behaviour. The employment tribunal (‘ET’) judge did not consider the exceptions as neither had been pro-actively pursued in oral evidence and held that s.111A applied. The Claimant appealed on the grounds that they should have been considered.


The EAT held that despite the Claimant not citing the legislation making a dismissal relating to pregnancy automatically unfair in her particulars of claim, it ought to have been clear to the reader that she is asserting a claim of automatically unfair dismissal. For that reason the exception under s.111A(3) is engaged. It further held the judge also failed to consider whether, if there is a claim of constructive discriminatory dismissal and constructive unfair dismissal, the latter must be based on what was an automatically unfair ground.

The EAT held that the exceptions contained in s.111A(3) and (4) should have been considered despite the fact they had not been expressly relied on. They highlighted that s.111A(3) will apply, simply where the circumstances of the Claimant’s case are such that a provision making the decision automatically unfair would be engaged.

S.111A(4) requires the tribunal to form an opinion, consider evidence and make a finding of fact as to whether there was improper conduct. The EAT held that although s.111A(4) had not been referred to, it is difficult to see how it should not be considered given the Claimant’s reference to letter as being ‘improper behaviour’. It further noted that discrimination is one of the examples of improper behaviour given by ACAS.

Overall, the EAT held that the facts of the case took it into the territory of both provisions and it was incumbent on the judge to proactively seek clarification on the precise live issues in relation to s.111A. It therefore remitted the matter back to the tribunal.

Implications for employers

The judgment is a reminder that employers should be vigilant when conducting pre termination negotiations and be sure that the reason for termination is clear. If the circumstances suggest a possibility of automatic unfair dismissal, the exception may apply even when not expressly relied on. It further highlights that when considering improper behaviour, the tribunal will make a finding of fact before admitting it and that discrimination will be regarded as improper behaviour.

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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