Protective award

Q: An employer has just announced 55 redundancies, and our union is applying for compensation for its failure to consult. How much can be claimed?

A: The amount of compensation for a failure to consult over collective redundancies is a “protective award”. Although the minimum consultation period in your case was 30 days (it is 30 days if the employer is proposing 20 to 99 redundancies and 90 days if it proposes 100 or more), the penalty for failing to consult is up to 90 days’ pay for each worker affected.

The maximum award used to be 90 or 30 days, depending on the number of redundancies, but this was changed by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1999.

When deciding how much to award, the tribunal must start at 90 days and reduce it only if there are mitigating circumstances. In the recent case of Hutchins v Permacell Finesse Ltd (in administration) UKEAT/0350/07, where 70 staff were made redundant with no consultation, the Employment Appeal Tribunal said they were entitled to 90 days’ pay; the tribunal had identified a “very grave breach” with no consultation at all, and the employer had not shown any reason why the award should be reduced.