Transatlantic Financial Services website Financial Markets & Business News – Here Is The City – The Financial Markets Guide quoted last week a passage from the book “The Making of Goldman Sachs”.  It dealt with how Goldmans successfully upgraded its London staff without significant claims or severance payments, i.e. by being very “civilised” about the whole thing.  Goldmans partner Gene Fife reportedly sat down privately with each of those involved and said “Not a word will be said here or anywhere, but you need to find another job that really suits your capabilities and interests much better than your present position.   Take the time you need to do it right, and in not more than six months be sure you have completed your search so that you can resign from the firm and move along with your career.  We will help you, but your next job is your choice to make and it is your responsibility to make it – just as it our choice to do this with dignity and consideration for you as a person“.

If you were being encouraged to “re-evaluate your career options”, or whatever other euphemism you choose, would you not want it put that way?  How very professional, how very caring, how very unlawful.

This is perhaps what the Government has in mind by its “protected conversations” proposal (see posts on 25 November and 9 December).  On the face of it, it would be to both parties interest that severances were introduced through such a route rather than formal performance or capability proceedings.  However, there are two points to bear in mind here.  First, Mr Fife was doing the deed in 1986, at a time when the constructive dismissal law was the same as now but re-employment prospects were much greater.  Second, if you strip that paragraph down to its basics, it is still a clear indication that the employee is no longer wanted on board.  If it were challenged through a constructive dismissal claim, victory for the employee would seem assured.

Nevertheless, a City employer adopting the same approach now might still get away with it, especially if the employee’s previous earnings were such as to make the unfair dismissal compensatory award look like lunch money anyway.  The employee may also recognise that the second least helpful thing you can do when looking for another job in the Square Mile is sue your previous employer.  The first least helpful thing?  To win.  Quite beyond the pale for a prospective hirer.

But absent those background factors and unless and until the protected conversation idea gets off the ground, we have to caution against such an approach as a matter of law, however superficially “civilised” it appears to be.