A "protected conversation" was admissible in evidence because of the employer's improper conduct.

The facts

Mr Kular was employed for eighteen years as the Financial Controller of Lenlyn UK Ltd, a foreign exchange business. Lenlyn engaged a contractor, Coin Co, to collect cash and bank it. Within six months of engaging Coin Co, it owed Lenlyn £1.9m. No one at Lenlyn had noticed this debt accruing, and Lenlyn was not able to recover the money as Coin Co had gone into administration. Lenlyn commissioned an external investigation, which found that, while there had been no dishonesty by any of Lenlyn's employees, the investigator blamed Mr Kular. The investigator said that his conduct could be "considered negligent", and that Lenlyn should consider the need for a "full disciplinary investigation".

The HR Manager decided that Mr Kular should be made an offer by way of protected conversation, instead of being subjected to disciplinary proceedings. Mr Kular was called in to meet her. He was told that the investigation was finished, and that the investigator's view was that he had been grossly negligent about Coin Co, that the company was considering taking disciplinary action, no decision had been made, but Lenlyn wanted to make a "without prejudice" offer of £18,000. The meeting was confirmed by letter, and he was given a settlement agreement. This meeting took place on 16 December, and he was told that the offer would lapse after 22 December. He was therefore only given six days in which to consider the offer and take legal advice.

Mr Kular was told that he was not required to attend work in the meantime. He was cut off from access to the computer systems.

On 22 December, Mr Kular resigned, claiming that the meeting on 16 December had been the last straw and had triggered a constructive dismissal.

If the meeting on 16 December had been, as Lenlyn had intended, a "protected conversation", Mr Kular would not have been able to refer to it in his constructive unfair dismissal claim. He argued that it was not protected, because of Lenlyn's improper conduct. He had not been given a reasonable time in which to consider the offer – the ACAS Code prescribes a minimum of 10 days, and he was only given six days. The tribunal said that this "undoubtedly" put pressure on Mr Kular, and was therefore improper conduct. The tribunal also said that it was untrue to say that the investigator had found him to be grossly negligent, and the report had therefore been misrepresented. This was, again, improper conduct. Evidence about the meeting on 16 December was therefore admissible.

What does this mean for employers?

This case is a clear reminder to employers that, if they do not follow the ACAS Code of Practice on Settlement Agreements, a conversation which is intended to be "protected" can be used to trigger a constructive dismissal claim. It is only an employment tribunal decision, so not binding on other tribunals.

UKEAT/0108/16/DM Lenlyn UK Ltd v Mr H Kular