In the second of our new series, cutting the jargon and getting to the heart of employment law, Daniel Isaac, principal in the employment team at City law firm Withers explains how to manoeuvre an unwanted employee towards an affordable deal.

Most employers prefer to strike a deal with an unwanted employee than go through time consuming procedures relating to poor performance or discipline.

Unfortunately, they sometimes find that employees use the offer of a severance package as grounds for asserting constructive dismissal and negotiating a bigger payout.

Manoeuvring an employee towards an affordable deal is an essential HR skill.

An amicable settlement requires mutual agreement and cannot be imposed on the employee. It is therefore essential to have identified a Plan B in case the employee is not prepared to reach a sensible deal.

Assuming that keeping them is not a palatable option, Plan B will generally be immediate dismissal (and payment of whatever compensation follows) or more usually following fair procedure. If the employee has already been told that they are no longer wanted, any subsequent attempt at a ‘fair’ procedure will look like a sham and the employer will be in a weak negotiating position.

Once Plan B is established, it is generally quite straightforward to say to the employee that there is a disciplinary issue, or a performance issue, or a potential redundancy but if the employee wishes there is an alternative of an agreed departure.

At this point, very few employees will fail to recognise the writing on the wall. An employee presented with a genuine choice between fighting their corner during a formal procedure or doing a deal cannot convincingly argue that they were given no choice and were therefore constructively dismissed.

Once an employer has decided to do this, we are often asked whether the offer should be in writing or oral, and whether it should be ‘without prejudice’ or open.

Sometimes a friendly ‘fireside chat’ is the most effective method. One potential difficulty is that, if it goes wrong, the employee may misrepresent what they were told; after a stressful meeting both parties often come away with completely different impressions of what was said.

If the offer is put in writing, the employer should be able to show any tribunal that the employee was presented with a genuine choice. Nevertheless, there will be cases where, given the individuals concerned, an undocumented fireside chat will be more effective than a letter.