The case of Gallagher v McKinnon Auto and Tyres serves as a reminder to employers to always conduct the pre termination discussions fairly and without improper behaviour.
The Employment Appeal Tribunal held in this case that the pre-termination negotiations were inadmissible in the employees attempt to bring an unfair dismissal claim.
The law concerning protected conversations is covered by the Employment Rights Act 1996. Such pre-termination discussions are inadmissible as evidence in an unfair dismissal claim if the employer conducts the discussion without improper behaviour. This allows the employer to speak privately and confidentially with the employee, to attempt to agree mutual terms to end the employment contract. This is possible even where there is not a prior dispute between the employer and employee. ACAS code recognises the provisions of the legislation.
The facts of Gallagher v McKinnon Auto and Tyres are the employee worked as a branch manager. He had been off for an extended period due to a medical condition. Because of economic reasons the employer decided that his senior position was no longer required and instigated the redundancy process. The employer called an off the record meeting with the employee and he was offered a settlement agreement and a short period of time to think it over. The employee was told if he declined the offer they would continue the redundancy process. The employee refused the offer of the settlement, and the employer proceeded with the redundancy process. The employee was selected for redundancy and was terminated.
The employee bought a claim for unfair dismissal and put forward the pre termination discussion as evidence to support his claim. The Employment Tribunal however decided that the pre termination discussion was protected and inadmissible.
The employee then appealed to the Employment Appeal Tribunal. He argues the employer’s behaviour was improper and hence invalidated the protected nature of the discussion. He argued that he had been taken by surprise by the meeting and only given a limited period of time to consider the proposal. He was told he would be made redundant if he refused the offer.
The Employment Appeal Tribunal held the employer had not demonstrated improper behaviour. It also said that redundancy had to be distinguished from disciplinary scenarios. Undue pressure is where the employee is told they will be dismissed if they do not accept the offer of the settlement. ACAS guidance applies to disciplinary situations. In this case the matter was a redundancy situation. The Employment Appeal Tribunal accepted in this case although the employee was told his role was redundant it did not mean he would definitely be dismissed as there was the possibility to consider alternative suitable work.
Employers should take advice before conducting pre termination negotiations with an employee to avoid potential pitfalls
If you require any further advice and assistance, please do not hesitate to contact our HR Advice Line on 01455 852028
However, this guidance specifically refers to a disciplinary situation. In this case, a redundancy situation had arisen. It was accepted that the Respondent had told the Claimant that his role was redundant. However, this did not mean that dismissal was inevitable as there were still the possibility of alternative employment.
