Protected conversations: what section 111A really covers

What a protected conversation is

Section 111A of the Employment Rights Act 1996 allows an employer and an employee to talk about ending the employment on agreed terms, and keeps that conversation out of an ordinary unfair dismissal claim.

The wording covers "any offer made or discussions held, before the termination of the employment in question, with a view to it being terminated on terms agreed between the employer and the employee". So it reaches the offer, the meeting, the emails setting it up and the negotiation that follows.

The reason it exists is practical. Before 2013 an employer could only hold an off-the-record conversation where a dispute already existed, which meant either manufacturing one or starting a formal process before anybody had asked whether a clean exit suited both sides. Section 111A removed that requirement.

How narrow the protection is

This is where employers get caught. Section 111A makes the conversation inadmissible in proceedings under section 111 of the Act, which is the ordinary unfair dismissal claim. It does nothing else.

An employee who brings a discrimination claim can put the whole conversation in front of the tribunal. So can one claiming automatically unfair dismissal, whistleblowing detriment, breach of contract, or unlawful deduction from wages. The protection also falls away where a statutory provision requires the employee to be treated as unfairly dismissed.

The practical effect is that section 111A is close to worthless where the employee has any discrimination point available. An employer who raises a settlement with somebody who has just announced a pregnancy, disclosed a disability or raised a protected disclosure should assume the conversation will be read out.

The exception for costs matters too. Evidence of a settlement offer stays admissible on questions of costs, where the right to refer to it was reserved.

Where this differs from without prejudice

Two separate protections sit alongside each other and they are regularly confused.

Without prejudice is a common law rule. It applies to genuine attempts to settle an existing dispute, and where it applies it covers every claim, unfair dismissal included. It requires a dispute to exist already: an employer who has heard nothing from the employee and simply wants them gone has no dispute to settle.

Section 111A needs no dispute, and that is its whole value. It buys less in return: a narrower shield covering one claim.

The two overlap. Where a grievance has been raised and the employer offers a settlement, both can apply, and marking correspondence without prejudice costs nothing. Where no dispute exists, the without prejudice label is decoration and section 111A is doing the work.

Improper behaviour

Section 111A(4) removes the protection where there has been improper behaviour, to the extent the tribunal considers it just. The Act does not define improper behaviour; the Acas Code of Practice on settlement agreements gives examples, and tribunals treat those as the starting point.

The recurring ones are undue pressure, and undue pressure has a specific meaning here. Telling an employee that they will be dismissed if they turn the offer down, before any process has been carried out, is the textbook example. So is refusing to give them time to consider it, refusing to let them be accompanied, or making an offer in a meeting they were told was about something else.

Harassment, victimisation, discrimination, physical assault and criminal behaviour are all improper. So is a threat of a disciplinary process that has no foundation.

Where improper behaviour is found, the tribunal admits as much of the conversation as it thinks fair, and the conversation is usually the most damaging document in the case.

Running the conversation

Give warning that a meeting is happening and what it concerns, without setting out the terms in advance. An employee ambushed in a one-to-one has a stronger improper behaviour argument than one who was told there was something to discuss.

Say plainly that the conversation is being held under section 111A and is intended to be off the record. Put the offer in writing afterwards so there is no argument about what was said.

Allow time. The Acas Code suggests a minimum of ten calendar days to consider a written offer, and an employer who allows less has handed the employee a point. Allow the employee to be accompanied by a colleague or union representative, which the Code recommends even though there is no statutory right.

Keep the language conditional throughout. A sentence that treats the outcome as decided reads as pressure on the page, whatever was intended in the room.

If you are the employee

An offer is an offer, and turning it down leaves the employment intact. An employer who then starts a process has to run it properly, and the fact that a settlement was raised first is not evidence that the process was a foregone conclusion, though it becomes one if the process is a formality.

Three things are worth working out before responding. What the claim would be worth if the dismissal were unfair, which is capped and depends on length of service and pay. Whether there is a discrimination or whistleblowing element, which is uncapped and changes the arithmetic completely. And what the notice, holiday, bonus and pension entitlements add up to, since those are owed regardless and should sit on top of any compensation.

The employer pays for the independent advice in almost every case. That is a contribution to the cost of advice on the terms and effect of the agreement, and it does not buy advice on whether the offer is a good one.

What the offer is made up of

A settlement offer is rarely one number, and the parts are taxed differently, so a headline figure tells an employee very little on its own.

Notice pay. Either worked, paid in lieu under a contractual clause, or paid as damages. It is earnings and is taxed, and since April 2018 the post-employment notice pay rules tax the notice element whether or not the contract contains a pay in lieu clause.

Accrued holiday. Owed in any event and taxed as pay.

Outstanding salary, commission and bonus. Owed, taxed, and frequently the thing that is quietly dropped from a first offer. Check the bonus scheme rules for what happens to an award that has been earned but not yet paid.

The compensation payment. This is the part that is genuinely negotiable. Termination payments of this kind are not taxable below £30,000, and the balance above that figure is taxed as income. The exemption applies to compensation for loss of employment; it does not cover anything the employee was contractually entitled to.

Everything that is not money. A reference in an agreed form attached to the agreement, continuation of private medical cover for a period, keeping a laptop or a phone, and the wording of any internal announcement. These cost the employer little and matter a great deal to somebody looking for their next job.

Restrictive covenants are the other half of the negotiation. An employer usually wants existing covenants confirmed and sometimes extended; a departing employee should check what is being confirmed, because a covenant that was unenforceable in the original contract can be made enforceable by being restated for fresh consideration.

Turning it into a binding agreement

A protected conversation settles nothing on its own. Statutory employment claims can only be waived through a settlement agreement meeting the conditions in section 203 of the Employment Rights Act 1996, or through an Acas COT3.

The agreement has to be in writing, relate to the particular complaint, and the employee must have received advice from a relevant independent adviser who is identified in the agreement and covered by insurance. The agreement must state that those conditions are satisfied.

A solicitor advising the employee signs a certificate to that effect, and only a solicitor, a certified trade union official or a certified advice centre worker can give it.

The mistakes that cost employers the protection

Raising it with somebody who has an obvious discrimination point, where the protection does not reach the claim they will actually bring.

Presenting dismissal as settled if the offer is refused, which is the clearest form of undue pressure.

Giving a deadline of a day or two, against a Code that suggests ten.

Holding the conversation after a process has already started and assuming section 111A cures whatever happened earlier, which it does not: it reaches the negotiation and nothing before it.

Writing the offer letter in terms that would embarrass the employer if read aloud. Where improper behaviour is argued, that letter is the first document the tribunal sees.

Frequently asked questions

What is a protected conversation?

It is a discussion about ending employment on agreed terms, held under section 111A of the Employment Rights Act 1996, which keeps the offer and the discussion out of an ordinary unfair dismissal claim. It does not need an existing dispute, which is what separates it from the common law without prejudice rule. The protection only covers unfair dismissal claims under section 111, so it does not stop the conversation being used in a discrimination or whistleblowing case.

Can a protected conversation be used in a discrimination claim?

Yes. Section 111A only makes the discussion inadmissible in an ordinary unfair dismissal claim. Discrimination, whistleblowing, automatically unfair dismissal, breach of contract and unlawful deduction claims are all outside the protection, so the conversation can be put in front of the tribunal in full. That is why raising a settlement with somebody who has an obvious discrimination point carries real risk for an employer.

How long should an employee be given to consider an offer?

The Acas Code of Practice on settlement agreements suggests a minimum of ten calendar days to consider a written offer, unless the parties agree otherwise. An employer who gives less has handed the employee an argument that there was undue pressure, which is one of the examples of improper behaviour that removes the section 111A protection and lets the tribunal see the whole conversation.

What counts as improper behaviour?

The Act does not define it, and the Acas Code gives examples that tribunals use as a starting point: undue pressure, harassment, victimisation, discrimination, physical assault and criminal behaviour. The most common in practice is telling an employee they will be dismissed if they refuse, before any process has been carried out. Where improper behaviour is found, the tribunal admits as much of the conversation as it considers just.

Do I have to accept a settlement offer?

No. Refusing leaves your employment intact and the employer has to follow a proper process if it wants to dismiss you. Before deciding, work out what an unfair dismissal claim would be worth given your service and pay, whether there is a discrimination or whistleblowing element which is uncapped, and what notice, holiday, bonus and pension you are owed in any event. Those are due whatever happens and should sit on top of any compensation.

Who pays for the legal advice?

The employer contributes in almost every case, and the contribution is stated in the agreement. It covers advice on the terms and effect of the agreement, which is what section 203 requires before statutory claims can be waived. It does not cover advice on whether the deal is a good one or negotiation on your behalf, so agree at the outset what is included if you want more than the certificate.

Sources & further reading

• Employment Rights Act 1996, section 111A
• Employment Rights Act 1996, section 203
• Acas: settlement agreements
• GOV.UK: dismissing staff

This article is general information, not legal advice. The law changes and depends on your circumstances — always take advice on your specific situation before acting. Last reviewed 21 September 2026. AD Solicitors Limited is a recognised body regulated by the SRA (no. 8011228).