The principle behind the introduction of Pre-Termination Negotiations (PTNs), another law change introduced under the Enterprise and Regulatory Reform Act 2013, is to make it easier for employer and employee to have an off the record discussion about termination of employment on agreed terms.
Such a discussion may anticipate a proposal to enter into a Settlement Agreement, as we must now call what was for many years a Compromise Agreement.
Interestingly, there is no need for there to have been a pre-existing dispute before the PTN discussion is held. On the face of it, the employer only needs to refrain from “improper behaviour” in this setting, to avoid losing the PTN’s protection.
But it may not be that straightforward. The employee might immediately assert that the whole conversation is a breach of trust and confidence, walk out and claim constructive dismissal and breach of contract – and evidence of the PTN would then be admissible. Likewise if the employee stopped the discussion in midstream, invoked a protected characteristic under the Equality Act regime (race, sex, age, disability, orientation, religion) and then argued “hidden agenda” via a discrimination claim. Or if the employee turned the offer down, and then asserted after his dismissal that he had been sacked for whistleblowing.
Theory, of course, may differ from practice. An employee invited to participate in such an off the record discussion may know full well that the writing has been on the wall for some time, and look straight away at the financial terms. But the need for employers to tread carefully here is never going to go away.
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