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Navigating workplace disputes can be extremely challenging. Protected conversations and settlement agreements can be valuable tools for resolving conflicts and terminating employment relationships on mutually agreed terms.

However, it is crucial to follow best practices to ensure compliance with legal requirements and maintain a fair and transparent process.

Protected conversations

Protected conversations are confidential discussions between an employer and an employee, aimed at exploring the possibility of terminating the employment relationship on agreed terms. These conversations cannot be used as evidence in subsequent unfair dismissal claims, except in specific circumstances.

Best practices for employers

  1. Clearly label the conversation: Before initiating a protected conversation, ensure that both parties understand the nature and purpose of the discussion. Explicitly state that the conversation is a “protected conversation” and that its content will be confidential.
  2. Maintain professionalism and respect: Protected conversations should not be used as a means to discriminate against employees or engage in improper behaviour, such as harassment or victimisation. Maintain professionalism and respect throughout the process.
  3. Allow reasonable time: Provide the employee with sufficient time to consider the proposal and seek independent legal advice. Rushing the process may lead to claims of undue pressure or coercion.
  4. Document the process: While the content of protected conversations is confidential, document the fact that such a conversation took place, the dates, and the parties involved. This documentation can be useful in case of future disputes.

Settlement agreements

Settlement agreements are legally binding contracts between an employer and an employee, which typically involve the employee agreeing to waive their rights to bring certain claims against the employer in exchange for a negotiated settlement package.

Best practices for employers

  1. Encourage legal advice: It is a legal requirement for employees to receive independent legal advice before signing a settlement agreement. Encourage employees to seek such advice and consider contributing to the legal fees.
  2. Provide clear and comprehensive terms: Ensure that settlement agreements clearly outline the terms and conditions, including the specific claims being waived, the settlement amount, any non-disclosure or non-disparagement clauses, and any ongoing obligations or restrictions.
  3. Offer reasonable compensation: The settlement amount should be fair and reasonable, taking into account the employee’s length of service, salary, and potential claims. Be prepared to negotiate in good faith.
  4. Respect confidentiality: Settlement agreements often include confidentiality clauses, which prohibit the parties from disclosing the terms or existence of the agreement. Respect these clauses and ensure that all relevant parties are aware of their obligations.
  5. Comply with statutory requirements: Settlement agreements must comply with relevant statutory requirements, such as the Equality Act 2010 and the Employment Rights Act 1996. Seek legal advice to ensure compliance and avoid potential claims of unfair dismissal or discrimination. Be mindful of the ACAS Code of Practice on Settlement Agreements which provides guidance on approaching settlement agreements and how to ensure conversations are protected.

By following these best practice points, employers can navigate protected conversations and settlement agreements effectively, minimising the risk of legal disputes and hopefully ensuring a transparent resolution for both parties.

Please note that this information is for general guidance only and should not substitute professional legal advice. If you have specific concerns, we recommend consulting one of our legal experts.


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