Kevin Gallagher v McKinnon’s Auto and Tyres Ltd

Section 111A of the Employment Rights Act 1996 makes both the fact and content of pre-termination negotiations inadmissible in ordinary unfair dismissal proceedings, unless the statutory impropriety exception applies.

Impropriety, including undue pressure, is a fact-sensitive question for the Employment Tribunal. The Tribunal must consider the circumstances as a whole. A proposal made in an unexpected meeting, a pre-determined redundancy of a role, and a short period to respond to an oral proposal do not necessarily amount to improper behaviour. The Acas Code’s general ten-day period concerns consideration of formal written settlement terms. An appellate court will not interfere merely because another tribunal might have assessed the facts differently.

The claimant, a branch manager, was absent through illness. His employer invited him to a meeting described as concerning his return to work. At that meeting it proposed an agreed termination on redundancy terms, with a payment of £10,000, and gave him 48 hours to indicate whether he accepted the oral proposal.

The Employment Tribunal found that the discussion was a pre-termination negotiation and that neither the meeting nor the subsequent messages involved improper behaviour. It therefore ruled the fact and content of the negotiations inadmissible in the claimant’s outstanding ordinary unfair dismissal claim.

The claimant appealed, alleging that the Tribunal’s conclusion on undue pressure was perverse. He relied on the redundancy proposal, the manner in which the meeting had been arranged, and the 48-hour period.

1. Appeal dismissed. The Employment Tribunal was entitled to conclude that the parties’ discussion was a pre-termination negotiation and that its fact and content were inadmissible under section 111A(1) of the Employment Rights Act 1996.

2. The statutory exception in section 111A(4) required the Tribunal first to determine what was said and done, then to decide whether there was improper behaviour, and, only if there was, the extent to which admission would be just. The party invoking the exception had to adduce evidence of impropriety. The Tribunal had made findings after hearing both parties and permissibly found that the meeting was calm and without aggression.

3. The employer’s statement that the branch-manager role was redundant, coupled with an indication that a redundancy process would follow if the offer were rejected, did not require a finding that dismissal had been predetermined. A redundant role does not inevitably mean that its holder will be dismissed, because redeployment may require consideration. The example in paragraph 18(e)(ii) of the Acas Code concerns a threatened outcome in a disciplinary process. It did not make the Tribunal’s finding perverse in a redundancy context.

4. The Tribunal could distinguish between conduct that might be unfair in the eventual unfair dismissal claim and conduct sufficiently improper to displace statutory inadmissibility. It was entitled to assess the surprise of the meeting with the other circumstances, including the calm discussion, the prompt explanation of the proposed payment, and the claimant’s opportunity to discuss matters with his family.

5. The Code permits an initial oral proposal. Its general minimum period of ten calendar days concerns formal written settlement terms and independent advice. The Tribunal was entitled to find, on the circumstances found, that the 48-hour period for responding to an oral proposal did not impose undue pressure. The factors did not cumulatively establish impropriety. The substantive unfair dismissal claim was to proceed without the excluded evidence.

• Employment Appeal Tribunal: dismissed the claimant’s appeal and upheld the Employment Tribunal’s preliminary ruling that the pre-termination negotiations were inadmissible.
• Employment Tribunal: at a preliminary hearing on 4 October 2023, held that the negotiations were protected by section 111A of the Employment Rights Act 1996 and that no improper behaviour had occurred. The substantive unfair dismissal complaint remained undecided.