Collective consultation obligations are triggered for employers who propose to dismiss as redundant 20 or more employees at the same establishment over a period of 90 days or less. The employer should begin consultation ‘in good time’ and in any event at least 30 days in advance of the first dismissals, unless it proposes to dismiss 100 or more employees within 90 days, in which case the minimum consultation period is 90 days.
Where an employer fails to comply with its collective consultation redundancy obligations, an employment tribunal can make a protective award of up to 90 days’ actual pay for each employee dismissed as, or proposed to be dismissed as, redundant. In 2004, in the case of Susie Radin Ltd v GMB & Ors, the Court of Appeal made it clear that a protective award is penal, rather than compensatory, in nature and that 90 days' pay should be awarded unless there are good reasons for awarding less.
The EAT has now confirmed, in Evans and Others v Permacell Finesse Ltd that this approach applies equally to 30-day, as well as 90-day, consultation cases. The EAT rejected the employer’s argument that that there must be a link between the length of the consultation period and the amount of the protective award.
Comment
It is now clear that in any case where the collective consultation duty is triggered, but breached, employment tribunals should heed the guidance given by the Court of Appeal in the Susie Radin case. In deciding whether to make a protective award and, if so, for what period, employment tribunals should bear in mind the following:
- The purpose of the award is to provide a sanction for an employer’s breach of its obligations set out in section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992, not to compensate employees for loss which they have suffered in consequence of that breach;
- Tribunals have a wide discretion to do what is just and equitable in all the circumstances but the focus should be on the seriousness of the employers default;
- That default may vary in seriousness from the technical to a complete failure to provide any of the required information and to consult;
- The deliberateness of the employer’s failure may be relevant, as may the availability to the employer of legal advice about its obligations under s.188; and
- Assessment of the length of the protected period is a matter for the employment tribunal, but a proper approach in a case where there has been no consultation, is to start with the maximum period (90 days) and reduce it only if there are mitigating circumstances justifying a reduction to an extent the tribunal considers appropriate.
Because protective awards are made for each employee dismissed, or proposed to be dismissed as, redundant, and are made on the basis of an employee’s actual pay, it is clear that they can prove exceedingly expensive for employers. This case emphasises the importance of employers complying fully with their collective consultation obligations.