UK: Unfair Dismissal: Pre-termination Negotiations

Authors: Charles Urquhart and Corinna Harris

The Employment Appeal Tribunal ruled that the employer’s actions during pre-termination negotiations did not amount to “improper behaviour.”

After Mr. Gallagher was absent from work for a number of weeks due to illness and, having managed successfully to cover his role during this period, McKinnon’s believed they could continue without a branch manager. He was invited to a “return to work” meeting where he was offered an enhanced redundancy payment in return for signing a settlement agreement.   This offer, which he was given 48 hours to accept to avoid a redundancy process, was described as “off the record” and “without prejudice.”  He did not accept this offer and was subsequently dismissed for redundancy.

To support his unfair dismissal claim, Mr. Gallagher sought to rely on McKinnon’s actions during the “off the record” meeting, which he argued put undue pressure on him. A tribunal found that this discussion was a pre-termination negotiation and this therefore could not be used in the tribunal.

The EAT dismissed his appeal, finding that the following actions did not put undue pressure on him:

• Telling him that a redundancy process would begin if he did not accept the offer
• Inviting him to a meeting to discuss his return to work after sick leave but instead using it to put forward the settlement proposal
• Setting a 48-hour deadline for accepting the proposal

Key Action Points for Human Resources and In-House Counsel

This is a useful reminder for employers of approaching protected conversations carefully, ensuring that it is made clear to the employee from the outset than their decision on the settlement offer will not impact any decision or action taken by the employer at a later stage. Although there are some limited circumstances in which a short period for acceptance is necessary, it is advisable to give employees a reasonable period of time to consider a settlement offer.

This case also highlights the importance of taking into account the ACAS Code of Practice on Settlement Agreements.

Mr_Kevin_Gallgher_v_McKinnon_s_Auto_and_Tyres_Ltd__2024__EAT_174.pdf