Protected Conversations for Employers

A protected conversation can be a useful way to explore an agreed exit with an employee without immediately committing the business to dismissal or another formal process.

But “protected conversation” is not a legal magic phrase. The important questions are why the discussion is taking place, what legal protection actually applies and whether the employer conducts it properly.

Section 111A of the Employment Rights Act 1996 can make qualifying pre-termination negotiations inadmissible in an ordinary unfair dismissal claim, even where there was no existing dispute beforehand. Its scope is limited, however. Other claims can fall outside it, and improper behaviour can weaken the protection.

For broader employer guidance, see our HR & Employment Law resources.

What is a protected conversation?

A protected conversation is the common description for a confidential discussion about potentially ending an employee’s employment on agreed terms.

The statutory protection comes from section 111A of the Employment Rights Act 1996. It applies to offers or discussions held before termination with a view to the employment ending on terms agreed between the employer and employee.

This is usually connected with a proposed settlement agreement.

For example, an employer may have concerns about performance, a deteriorating working relationship or another situation where an agreed exit could produce a better commercial outcome than a lengthy formal process.

The employee does not have to accept the proposal. Settlement is voluntary.

A protected conversation should therefore be viewed as a risk-management mechanism, not the strategy itself. The first question should be what outcome the business needs and whether an agreed exit is actually the best route.

When can section 111A apply?

One of the important features of section 111A is that there does not have to be an existing employment dispute.

An employer can therefore raise the possibility of an agreed exit before disciplinary, capability or other formal proceedings have started.

That is different from the common-law without-prejudice rule, which normally requires an existing dispute.

Section 111A does not mean an employer can manufacture a dismissal decision first and then hide it behind a supposedly confidential discussion. Any alternative process still needs to be genuine if settlement is rejected.

As at 9 September 2026, most employees still generally require two years’ qualifying service to bring an ordinary unfair dismissal claim. The Employment Rights Act 2025 is due to reduce that qualifying period to six months for dismissals from 1 January 2027. Existing day-one automatically unfair protections remain separate.

The change does not abolish section 111A, but it will substantially increase the number of employees potentially able to bring an ordinary unfair dismissal claim.

Protected vs without prejudice

Protected conversations and without-prejudice discussions are related concepts, but they are not interchangeable.

Acas expressly distinguishes the two protections. Where there is an existing dispute, both may potentially operate at the same time. The without-prejudice exception of “unambiguous impropriety” is narrower than the section 111A test of improper behaviour.

Simply writing “without prejudice”, saying “off the record” or calling a meeting a “protected conversation” does not create protection if the underlying legal requirements are not met.

What claims are not protected?

The most important limitation for employers is that section 111A does not protect every possible Employment Tribunal claim.

The statutory confidentiality does not generally extend to:

• discrimination, harassment or victimisation claims;
• automatically unfair dismissal claims;
• whistleblowing-related dismissal claims;
• dismissal for asserting certain statutory rights;
• trade-union-related automatically unfair dismissal;
• breach of contract claims; or
• wrongful dismissal claims.

Acas specifically confirms these limitations.

That does not necessarily mean the discussion will always be admissible in those proceedings. If a genuine existing dispute already existed, the separate without-prejudice rule may provide protection.

But an employer should never start a conversation on the assumption that everything said will remain confidential.

This is particularly important where discrimination, whistleblowing or another automatically unfair reason could realistically be alleged.

When should an employer consider one?

A protected conversation can make commercial sense where both parties might benefit from certainty and an agreed conclusion.

Examples can include:

• persistent performance concerns;
• a serious deterioration in the employment relationship;
• a potentially difficult restructure;
• an uncertain or contested employment situation;
• circumstances where the cost, time and disruption of a lengthy process may outweigh the value of pursuing it.

Settlement should not be the reflexive answer to every management problem.

Where the employer has a strong position and a straightforward formal route, managing the issue properly may be the better option. For example, our guide on how to manage poor performance explains the formal approach where capability is the real issue.

Similarly, where a genuine redundancy situation exists, employers should still understand the appropriate redundancy process for employers rather than using settlement discussions to avoid a proper exercise.

Harrington Raine’s position is straightforward: Defend first. Settle when it makes sense.

Step 1 — Decide the outcome you want

Start with the commercial objective.

Do you genuinely want the employee to leave? Is preserving the relationship still realistic? Is speed important? Is there a formal process available that would produce a better result?

Then consider whether a negotiated exit is actually worth pursuing.

The fact that section 111A may be available does not itself make settlement the right answer.

Step 2 — Assess the alternative route

Before inviting the employee to a conversation, decide what happens if they say no.

This is the employer’s Plan B.

Depending on the circumstances, that might be:

• continuing performance management;
• commencing or continuing a disciplinary process;
• conducting a genuine redundancy exercise;
• managing absence or capability;
• dealing with an outstanding grievance; or
• simply maintaining the existing employment relationship.

The alternative must be real.

If an employer has already decided that the employee will be dismissed regardless of what happens, a subsequent process can be vulnerable to an allegation that the outcome was predetermined.

Where dismissal rather than agreement is the likely route, our dismissal advice for employers service explains how Harrington Raine can support the underlying decision and procedure.

Step 3 — Prepare the offer

An employer should understand the broad commercial package before holding the conversation.

That may include:

• proposed termination date;
• notice or payment in lieu;
• accrued holiday;
• any additional settlement payment;
• treatment of bonus or commission;
• an agreed reference;
• confidentiality provisions where appropriate; and
• a contribution towards independent advice.

The initial discussion can be verbal. A legally binding settlement agreement that waives statutory claims must ultimately satisfy the relevant statutory requirements, including being in writing and identifying the particular claims being settled.

Employers commonly contribute towards the cost of the employee obtaining independent advice. Acas says employers should consider doing so, although there is no legal requirement to fund that advice.

Do not make an offer without first understanding the underlying employment case. The value of settlement should be judged against the employer’s actual risk and commercial objectives.

Step 4 — Hold the conversation

Explain calmly why the discussion is taking place.

The employee should understand that:

• the proposal is voluntary;
• they do not have to accept it;
• they can negotiate;
• no agreement has yet been reached; and
• if agreement is not reached, the employer will consider the appropriate next step.

Acas recommends explaining the reasons for making the proposal and answering the employee’s questions.

It is usually sensible to explain the realistic alternative in neutral terms.

There is an important difference between saying:

“If we do not reach agreement, we may need to begin a formal capability process.”

and effectively saying:

“Sign this or you will be dismissed.”

The first can be a factual explanation of the alternative. The second may amount to improper pressure depending on the circumstances.

There is no statutory right to be accompanied at a section 111A settlement meeting simply because it is a protected conversation. Acas nevertheless says employers should allow accompaniment by a colleague, trade union official or representative as good practice.

Step 5 — Give reasonable time

Do not present the employee with written terms and demand an immediate answer.

The Acas Code says parties should have a reasonable period to consider a proposed settlement agreement. As a general rule, it recommends at least 10 calendar days to consider the formal written terms and obtain independent advice, unless the parties agree otherwise.

That is Acas guidance rather than an inflexible statutory deadline.

The circumstances still matter. An employee may reasonably need longer, including where a disability creates a need for adjustments.

An arbitrarily short deadline can also contribute to a finding of improper behaviour.

What is improper behaviour?

Section 111A protection is qualified where something said or done is improper, or connected with improper behaviour.

What amounts to improper behaviour ultimately depends on the circumstances and is for an Employment Tribunal to decide.

Acas gives examples including:

• harassment, bullying or intimidation;
• offensive or aggressive conduct;
• physical assault or threats;
• victimisation;
• discrimination; and
• undue pressure.

Undue pressure can include failing to provide reasonable time to consider an offer.

A particularly important Acas example is an employer telling an employee, before any disciplinary process has begun, that they will be dismissed if they reject the settlement proposal.

That does not prevent an employer explaining the likely alternatives neutrally. An employer can say that a disciplinary or capability process may follow where that genuinely reflects the situation.

The safest approach is not to search for clever wording. Conduct the discussion professionally and say only what the business could justify if the circumstances were later scrutinised.

What if the employee rejects the offer?

Normally, employment simply continues.

The employer then needs to decide what should happen to the underlying problem.

That may involve a formal process, further informal management, another attempt to resolve matters or no immediate action at all.

A settlement proposal does not give the employer permission to skip a fair process afterwards.

Equally, rejection of an offer does not prevent the parties making another proposal later. Acas confirms that settlement proposals can be made at any stage of the employment relationship.

If matters ultimately develop towards litigation, Acas Early Conciliation for employers may become relevant before an Employment Tribunal claim is pursued.

Can a formal process continue afterwards?

Yes.

A protected conversation does not stop an employer from subsequently pursuing a disciplinary, capability, redundancy or other appropriate procedure.

The key issue is whether that process is genuine.

Acas states that where settlement is rejected, the parties may use an appropriate performance, disciplinary or grievance process and that employers should still follow a fair procedure.

Managers should therefore avoid statements during settlement discussions suggesting that dismissal has already been decided.

The protected conversation and formal process should also be managed carefully as separate exercises. The settlement offer should not be treated as evidence that the employee has committed misconduct or performed poorly.

From conversation to settlement agreement

If agreement is reached in principle, the next step is usually a written settlement agreement.

For a settlement agreement to validly waive relevant statutory employment claims, legal requirements must be satisfied. These include the agreement being in writing, relating to particular claims and the employee receiving advice from a relevant independent adviser who is appropriately insured and identified in the agreement.

The employee therefore needs independent advice before the settlement agreement can take effect in the required way.

A verbal agreement during the meeting should not be treated as though the statutory settlement process is complete.

Employers considering this route can read about Harrington Raine’s settlement agreements for employers service.

Common protected conversation mistakes

The most common errors usually come from treating protection as automatic.

Employers should avoid:

• assuming everything said is confidential;
• confusing section 111A with without prejudice;
• believing the words “protected conversation” create legal protection;
• making threats or applying unreasonable pressure;
• imposing an unnecessarily short deadline;
• failing to consider possible discrimination or whistleblowing issues;
• approaching the employee without a credible Plan B;
• revealing that dismissal has already been decided;
• allowing a subsequent formal process to become a sham;
• making a financial offer without assessing the underlying employment risk; and
• treating settlement as the default solution to ordinary management problems.

A protected conversation works best when the employer already understands its legal position, commercial objective and alternative route.

Frequently asked questions

Can an employer offer a settlement agreement without an existing dispute?

Yes. That is one of the main differences between section 111A and the without-prejudice rule. Qualifying pre-termination negotiations can receive section 111A protection even where there was no existing dispute beforehand.

Does saying “without prejudice” make a conversation confidential?

No. The label is not enough. Without-prejudice protection normally requires an existing dispute and a genuine attempt to settle it.

Should I describe the meeting as a protected conversation?

You can, but the description does not determine whether section 111A applies. Explain the nature of the meeting clearly, but concentrate on conducting it properly rather than relying on a label.

Can I tell the employee they will be dismissed if they refuse?

Employers should be extremely careful. Acas identifies telling an employee before disciplinary proceedings have begun that they will be dismissed if they reject the proposal as an example of undue pressure and potential improper behaviour. A neutral explanation that a genuine formal process may follow is different.

Can an employee secretly record a protected conversation?

Employers should assume that any sensitive discussion could potentially be recorded or later scrutinised. Whether a covert recording creates separate disciplinary or trust issues will depend on the circumstances and relevant workplace rules. A recording does not automatically make material protected by section 111A admissible, but the discussion may still matter to claims outside section 111A or where improper behaviour is alleged.

Harrington Raine’s practical recommendation is simple: do not say anything in a protected conversation that the business would be unable to defend if the circumstances later became contentious.

Does the employee have a right to be accompanied?

There is not a specific statutory right to accompaniment merely because a settlement discussion is being held. Acas nevertheless recommends allowing a colleague or trade union representative to attend as good practice.

Does the employer have to pay the employee’s legal fees?

No. The employee must obtain the required independent advice for a valid settlement agreement, but the employer is not legally required to pay for it. Acas recommends that employers consider contributing because it helps the employee obtain the necessary advice.

What changes in 2027?

The Employment Rights Act 2025 is due to reduce the ordinary unfair-dismissal qualifying period from two years to six months for dismissals from 1 January 2027. Separate regulations concerning the use of NDAs in harassment and discrimination cases are also scheduled for 2027. Those NDA reforms are enacted but are not yet in force as at 9 September 2026.

The practical consequence is that employers should not treat current settlement-agreement confidentiality drafting as permanently fixed. This resource should be reviewed when those provisions commence.