Regulation update: Protected conversations

In November 2011 David Cameron announced a consultation for the idea of ‘protected conversations’ in the workplace. The aim is to make it easier for employers to manage difficult employment issues with less risk of a tribunal claim. Chris Coopey, head of manufacturing group at accountancy association MHA and partner for Carpenter Box LLP, explains.

Where we are now

At the moment, dealing with an employee who underperforms or misbehaves can be both complex and risky. Managing underperformance is about having a fair process and sticking to it, but this is not as easy as it sounds. Often, employers or managers cannot face the idea of following what they see as a complex process to manage someone out. Apart from the time and expertise required, employers fear the possibility of a tribunal claim, which may cost them many thousands of pounds in legal fees and compensation.

According to the British Chambers of Commerce, one in five SMEs surveyed (Oct 2011) has been threatened with an employment tribunal, while the majority of smaller firms believe that employment tribunals are weighted unfairly against the employer. BIS figures show that in 2010/11 the average cost to a business defending itself against a claim was £4,000.

As things stand, conversations between employers and employees are only regarded as ‘protected’ when they relate to a possible exit arrangement and then only where there is an existing dispute. Even at this, the end-game of the employer-employee relationship, the negotiation of a so called ‘compromise agreement’ can be fraught and expensive.

The proposal

Introducing a structure for ‘protected conversation’ would mean that if such a conversation was requested by an employer (or an employee), it could take place within that legal netherworld known as ‘without prejudice’. In other words, anything said during such a conversation, could not later be used in evidence in a tribunal or court of law.

The thinking behind this is that employers, and particularly SMEs (who may not have a qualified HR resource and for whom a long drawn out process can be both expensive and morale sapping) will be able to deal with performance issues much more simply and with far less risk of a tribunal claim than is presently the case.

Feasibility

So, is the idea of a protected conversation workable? Critics have cited the difficulty of framing the rules around such conversations, particularly in relation to anything that might smack of discrimination. On this point, former employment relations Minister, Edward Davey has confirmed that the aim is not to protect employers who make discriminatory comments. He says that the Government’s focus is to facilitate a balance, so that people would understand what a protected conversation is and when one was taking place, but without the process becoming so complex and rule bound as to defeat the object.

A number of HR professionals and employment lawyers have already commented that while the aim may be laudable, in practice the goal may be very difficult to attain.

Ben Willmott, head of public policy at the Chartered Institute of Personnel and Development, commented: “proposals to introduce some form of ‘protected conversation’ to allow employers to discuss issues like retirement and poor performance without fear of a tribunal claim, while well meant, are likely to actually increase confusion among employers, add to red tape and generate additional legal disputes. By offering false comfort, the Government risks creating a field day for employment lawyers, and a nightmare for businesses.”

No date or terms of reference have been set for the protected conversation consultation, but BIS predict it will commence in the next 2-3 months.