Can I safely discuss letting him go? Protected Conversations and Settlement Agreements

I have an employee who has just become completely disengaged with his job. He is employed by us as a salesperson in our small furniture saleroom and he needs to be much more customer friendly than he is. I have asked him if there is anything wrong but he says no and just denies there is a problem but says he is thoroughly  fed up with his job. He has been with us for 3 years now. Can I safely have a conversation with him to suggest he might want to think about leaving?

Previously it was quite difficult to initiate this sort of conversation when no existing dispute or issue existed between the employer and the employee. However in 2013 new legislation came into force which provides that even where no employment dispute exists, or even if the employee is unaware that there is a problem, the employer may still initiate, discuss and ultimately offer an agreement (known as a settlement agreement) in the knowledge that their conversations will be confidential and  cannot be held against them in any subsequent claim to an employment tribunal for unfair dismissal.

However just be careful to ensure that when you initiate these discussions you follow these guidelines:

1.  Ensure there is no unlawful victimisation or discrimination in what you are doing. For example if you want to exit the employee because of impaired performance through a disability, this is likely to fall foul of discrimination legislation and would therefore not be covered by the confidentiality arrangements. So these discussions could be referred to at a claim for disability discrimination.
2.  Think about what you might want to offer the individual by way of financial payment to accept the settlement agreement. Remember they will also be entitled to either work or be paid for their notice period and any outstanding holidays they have left.
3.  If this is coming ‘out of the blue’ for the member of staff think about how you can approach them sensitively about this.
4.  You should now write to them confidentially confirming a meeting. Although not a legal requirement, you might also want to give them the opportunity to be accompanied by a work colleague or trade union representative. In this letter you can outline the settlement package you are proposing – there is a template letter in the ACAS guidance.
5.  At the first meeting it is sensible to explain to your employee why they are there, and the problems you have encountered with them. Also explain the confidentiality arrangements which will apply to the meeting and the implications of accepting the settlement – i.e. they give up the right to apply to an employment tribunal for unfair dismissal.
6.  Once you have met with the employee, and hopefully agreed the settlement, you will need to produce the final settlement agreement document. There is a template in the ACAS code which you can adapt. Remember they must be given 10 working days to be able to consider your offer. They also have to take formal independent advice from a lawyer or other qualified and insured adviser (you might want to offer to contribute to or even pay for this as a goodwill gesture – around £200 – £300 would probably be about right). The settlement agreement will not be valid unless they have done this. You may find their adviser will request some changes to the agreement. You should consider these, and if you agree with them you can build them into the final document. If you are in any doubt, you might also wish to speak to a legal adviser. Make sure the employee’s adviser has signed a declaration to confirm they have advised the employee – this is incorporated into the ACAS template.
7.  You might also want to agree a reference with the employee as part of the deal.
8.  If the employee does not accept the offer of a settlement agreement, then you should pursue other fair methods to address their performance issue – for example through a capability or disciplinary process.

(Article reviewed March 2018)