The company is experiencing significant difficulties with a particular employee. There have been performance issues with this employee, however, it has not been possible to progress through the internal process due to periods of absence on the part of the employee. The business is becoming frustrated with our lack of progress and would be willing to make a once off offer to the employee to exit the business subject to signing a compromise agreement.

We have had protected conversations with employees in our UK entity and have found them helpful to expedite exits from the business. However, we are not sure whether we can have such a conversation with an employee in our Irish business. We do not know if the employee will be open to this offer, and we want to know if and how to approach this conversation with the employee.

How do we handle it?

Protected conversations, as provided for under UK employment law, are essentially frank pre-termination discussions about an agreed exit from the organisation, and once certain conditions are met, the conversations cannot be used against either party in subsequent proceedings.

There is no similar statutory concept in Irish employment law. However, Irish employers are often of the view that, once they state to an employee that a discussion is “without prejudice” or “off the record”, or that anything that might be said during that discussion cannot be disclosed by the employee at a later date, in particular, in any subsequent legal proceedings, the conversation is protected. However, this is simply not the case.

The “without prejudice” principle means statements made in a document marked “without prejudice” or made verbally on a “without prejudice” basis, are generally not admissible in Court as evidence against the person making the statement. This protection is provided on the basis that that it is in the public interest to encourage parties to settle disputes and avoid litigation. Generally, for a discussion to be without prejudice there must be a dispute between the parties at the time of the discussion and the communication must be a genuine attempt to resolve that dispute. In an employment context, where the conversation is about a proposed exit situation, there is generally no dispute sitting in the background.  That dispute may come at a later stage, but may not have been in existence, or even in contemplation, at the date of the discussion.

In the UK case of BNP Paribas v Mezzotero [2004] IRLR 509, EAT (UK), the Employment Appeal Tribunal restricted the circumstances in which evidence of “without prejudice” communications could be excluded from a tribunal hearing. The “without prejudice” rule applied only where there is already a dispute between the parties. The mere fact of a grievance having been submitted by an employee did not in itself cause the parties to be “in dispute”.

This means there are always legal risks attached to making a without prejudice offer to an employee to terminate employment. Protected conversations can be introduced as evidence before the Workplace Relations Commission or a Court and could be used to argue that any future dismissal was predetermined. Risks are further increased if there is a history of performance or conduct issues with the employees which predate the offer. So employers who decide to proceed with such conversations must do so in the knowledge of the risks attached and should only do so after balancing the risks.

Where it is the employee who approaches the employer with a proposal for an exit, the employer might be in a position to consider that proposal. However, if the proposal emanates from the employer, and the proposal is rejected by the employee, it can taint any future termination process involving that employee. Any future attempt to exit the employee through a valid process could be deemed tainted by an earlier conversation, whether the parties had labelled it protected or otherwise.

Legal Island Training Resources for Your Staff

HR Toolkit | eLearning Course

Are you responsible for overseeing the implementation of training for all employees in your organisation?
Legal Island has created an HR Toolkit that aims to provide comprehensive training to assist HR professionals in supporting line managers and employees throughout the employee journey. The suite of courses will offer practical advice to assist you in updating your processes and procedures and help you understand your legal obligations.

Click here to view our HR toolkit.