Section 111A of ERA 1996 may provide a useful alternative. It has been available now for nearly 10 years but remains underused.
What is Section 111A?
Section 111A restricts the type of evidence which may be relied on in a Tribunal. You may know that “without prejudice” correspondence allows parties who are in dispute to correspond with one another about the strengths and weaknesses of their own case and to make offers to settle, in the knowledge that this correspondence cannot be used by the other side in evidence before a Tribunal.
Section 111A stretches the “without prejudice” rule so that it also applies to communications between parties who are not yet in dispute. As the section says, it applies to “…any offer made or discussions held, before the termination of the employment in question, with a view to it being terminated on terms agreed between the employer and the employee.” This enables an employer (or an employee) to discuss an employee’s future (or their lack of one) and make an offer of settlement without first being in dispute or reacting to a claim from an employee. Used properly, it may allow you to manage your workforce rather than reacting to employee claims.
For example, before beginning a lengthy performance review, have a Section 111A discussion with the relevant employee, point out the apparent shortcomings of their performance and suggest that one option may be for the employee to leave your employment on agreed terms, rather than go through a protracted performance review which may lead to their dismissal.
What are the limitations of Section 111A?
Section 111A has its limitations.
- Section 111A correspondence is only excluded from Tribunal evidence in claims of unfair dismissal. The rule does not apply, for example, to claims made to the Tribunal of discrimination, harassment, victimisation, breach of contract, wrongful dismissal or claims or automatic unfair dismissal. Section 111A is, therefore, best used in the areas of possible redundancy, conduct, performance or (where appropriate) some other substantial reason as these are likely to result in a claim for unfair dismissal.
- Section 111A protection is lost should there be “improper behaviour” on the part of the employer (or the employee). If “improper behaviour” is alleged by a party, the Section 111A discussions may become admissible as evidence should the Tribunal consider it “just”.
Examples of such “improper behaviour” include:
- Harassment, bullying and intimidation
- Physical assault, threat of physical assault and other criminal behaviour
- Victimisation
- Discrimination
- Undue pressure, including:
- Not giving an employee reasonable time to consider an offer of settlement
- Saying that the employee will be dismissed if the settlement proposal is rejected by them.
Points to note
Section 111A is available to both employer and employee.An employee may commence a Section 111A discussion with you and, indeed, propose Settlement Agreement terms to you.A concession in the discussion that, for example, their performance or behaviour is poor may not be replied on by you in subsequent Tribunal proceedings.
It is wise to state in your letter of invitation to the meeting that Section 111A will be relied on and repeat this when the meeting begins.
ACAS has confirmed that an employee is not entitled to be accompanied to a Section 111A meeting. It nonetheless recommends the employee be accompanied. This is sensible guidance as precisely what is said at the meeting will be important and should be agreed with the employee.
It is possible to make a written offer, following a Section 111A discussion, which may be relied when making a later application for costs – as you can with a “without prejudice save as to costs” letter.
What if the employee claims that the Section 111A process is discriminatory? You should end the process and begin “without prejudice” negotiations instead as a claim has now been made by the employee.
Top tips
- Make clear you are using Section 111A
- Remember the wording of Section 111A – make an offer which takes effect on termination
- In order to ensure you do not behave improperly, give the employee time to consider the offer you make and to seek legal advice
- Always provide the employee with an alternative to settlement and termination. Say: “You can settle with us on terms to be agreed and here are our proposed terms.… It is a matter for you … We can instead commence a redundancy/disciplinary performance review procedure against you which may, but may not, lead to your dismissal.”
- Finally, try and avoid what happened in the case of Crespigny v Information Security Forum Limited. During a Section 111A meeting with his employer, Mr Crespigny was told he had lost the confidence of his staff, that his employer wished his employment to end in a “constructive way” and that he would lose his job in two days. No offer was made to him. The Tribunal found that the discussions were not “pre termination negotiations” under Section 111A because there was no settlement offer and no negotiations with a view to the employee’s employment being terminated on agreed terms
DMH Stallard’s Employment Group can assist you in resolving the type of issue highlighted in this article. If you face a similar situation and need assistance to resolve it, please contact Stephen ten Hove.
