Protected Conversations Remain Inadmissible in Redundancy Situation

In the EAT case of Gallagher v McKinnon Auto and Tyres, the Judge upheld an Employment Tribunal’s ruling that pre-termination negotiations between the employee (the Claimant) and the employer (the Respondent) were inadmissible in an unfair dismissal claim.

Under Section 111A of the Employment Rights Act 1996, “protected conversations”—confidential discussions about ending employment—are generally inadmissible in ordinary unfair dismissal cases unless there is evidence of “improper behaviour.” This protection enables employers and employees to negotiate potential termination terms without a prior dispute, supported by guidelines in the Acas Code of Practice.

The case involved the Claimant, a branch manager, who returned to work after a sickness absence only to learn that his role was potentially redundant. During an “off-the-record” meeting, he was offered a settlement agreement with a 48-hour deadline to respond and was informed that redundancy would follow if he declined. The Claimant rejected the offer and was subsequently dismissed for redundancy. In his unfair dismissal claim, he sought to introduce evidence of the settlement discussions, arguing they showed unfair treatment. The tribunal, however, found the conversations protected and thus inadmissible, as no improper behaviour was evident.

The Claimant appealed to the EAT, asserting that the employer’s conduct constituted improper behaviour because: (1) the meeting was unexpectedly a redundancy discussion rather than a return-to-work meeting; (2) he was given only 48 hours to respond; and (3) he was warned of impending redundancy if he declined the offer.

The EAT dismissed the appeal, finding that points (1) and (2) did not amount to improper behaviour. For point (3), the EAT clarified that while undue pressure (e.g., threatening dismissal if an offer is not accepted) is improper in disciplinary contexts, it does not necessarily apply in redundancy cases. Here, redundancy was a legitimate business decision, and alternative employment was still an option for the Claimant, so dismissal was not inevitable.

This case underscores the importance of Section 111A protection for “without prejudice” conversations, while also highlighting that improper behaviour must be specifically significant to override that protection.

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