We are frequently asked if it is possible to discuss an exit with an employee or to talk to them about agreeing a “severance package”.
Often employers consider that once the conversation is called “off the record”, an employee is not permitted to raise it at a later date and an employer essentially has a free reign to bring up what he/she wishes.
Unfortunately for employers, this is not the case in Ireland.
Approach with caution
Employers should be careful when seeking to discuss a severance with an employee. A relatively innocent comment such as “you’re struggling with things recently” or “this disciplinary will be a long and difficult process for you”, may justify a claim for constructive dismissal. Depending on the comment and the context, an employee can argue that it was clear that the employer had decided that he or she was no longer a good fit and wanted them out of the company.
Generally, in litigation terms, when lawyers mark a conversation or document as being “without prejudice” or “off the record” this means that statements made in a document or made verbally, in a genuine attempt to settle a dispute, will not be admissible in court.
However, in an employment context, the parties are not in a position of equal bargaining power. A court or tribunal will permit an employee to make reference to any statements made by his employer, even where the employer felt the comment was “off the record”. An employee can be awarded up to two years’ remuneration (which is salary plus benefits), re-instatement or re-engagement if he is found to have been unfairly dismissed.
There is generally less of a risk if the conversation is started by an employee. However, the process should still be approached carefully until a binding compromise agreement is in place. Often the safest way to do this is to ensure that any discussions take place between the parties legal representatives so that they can be genuinely “off the record”.
UK protection for “off the record” conversations
Recent UK legislation has sought to resolve some of the problems identified in this article. Since July 2013, “protected conversations” are not admissible as evidence in an Employment Tribunal in the UK. Protected conversations are now used as a vehicle to make an offer and negotiate the end of an employee’s employment on agreed terms. For a conversation to be protected, there must not be any improper behavior in the negotiating process. Such behavior would include any form of harassment, discrimination or putting an employee under pressure.
Top Tips for where an “off the record” conversation is required
1. Decide on Plan A and start that process before any “off the record” conversation is commenced
If difficulties are arising because of an employees’ conduct or performance, start a disciplinary process or performance process in line with your company policy. These conversations can sometimes arise more naturally in the context of the process.
2. Confirm and agree with the employee that the conversation is “off the record” before making any comments
Be careful not to make any remarks before agreeing and seeking to ensure that the employee understands what “off the record” means.
3. Ensure that you do not say anything which could give rise to a claim in its own right
The WRC will ignore that any conversation was “off the record” if a comment gives rise to a claim for discrimination. This may cover any comments made in relation to an employee’s sex, race, age etc.
4. If in doubt, ask your employee if he/she has a solicitor and allow the solicitors to agree the exit on a formal “off the record” basis.