In London Borough of Barnet v Unison and another UKEAT/0191/13, the EAT had to decide the starting point for a protective award where there had been a failure to inform and consult in a collective redundancy and TUPE situation. The EAT decided that, where there had been some consultation (as opposed to none at all), the starting point was not the maximum award.
An employer carrying out collective redundancy consultation or pre-transfer TUPE consultation is required to provide appropriate employee representatives with certain written information. Following the coming into force of the Agency Workers Regulations 2010 (AWR), this information includes:
- the number of agency workers working temporarily for and under the supervision and direction of the employer
- the parts of the undertaking in which they are working
- the type of work they are carrying out.
If the employment tribunal finds that this has not occurred then it must make a declaration and is able to award compensation. The maximum compensation in redundancy situations is 13 weeks' actual pay per employee and under TUPE it is 90 days' actual pay per employee. Under TUPE, the old and new employers are jointly and severally liable in respect of the compensation payable.
The London Borough of Barnet (the Council) gave notice to Unison and other trade unions on 26 October 2011 that it was proposing to make redundancies, which would potentially affect 97 employees. This was part of an ongoing redundancy and TUPE transfer process, with employees transferring to Barnet Homes and NSL Ltd (the second respondent). Although the AWR had come into force by then, neither the trade union (at least at the branch level) nor the Council was aware of the implications. Unison did however raise an issue regarding the "lack of transparency" regarding agency workers in November 2011. The Council had provided some information as to the teams that used agency workers but not all of the information that was required.
Around 16 employees were made redundant on 31 March 2012. Unison brought a claim for failure to provide all information required by law. The Council accepted that, for a period, the information it provided did not comply with the law so the employment tribunal had to decide how to calculate the compensation. The Council argued that, despite its failure to provide specific information about agency workers, it had consulted extensively and the information provided was in all other respects considerable and this should have a mitigating effect. It also suggested that any TUPE award could only be made in respect of those who were made redundant post-transfer and not all those employees who had transferred.
Employment tribunal decision
The tribunal made the following awards against the Council:
- In relation to the 16 redundancies that took effect on 31 March 2012, the award equated to 60 days' pay.
- Regarding the transfer to Barnet Homes on 1 April 2012, the award was equivalent to 40 days' pay.
- For the transfer to NSL Ltd on 1 May 2012 the award was equivalent to 50 days' pay.
The tribunal stated that: "We also accept that Susie Radin indicates that we start with a maximum only where there is no consultation and that cannot be said to be the position in this case. Having said that, we are not quite sure where we should start if we do not start with the maximum and work down. It was not put to us by either of the respondents' representatives that there was a better place to start and given that, in our view, this is a relatively serious failure, we do indeed start with the maximum."
The tribunal rejected the Council's submission that the award should only cover those employees made redundant after the transfer, holding that it applied to all employees who either transferred or were made redundant. The Council appealed against
The EAT allowed the Council's appeal on both grounds. It found that the tribunal had misdirected itself in law, as use of the maximum award for the starting point was only for when there had been no consultation at all and there had been some consultation in this case.The case was remitted to the same tribunal to reconsider its decision in light of the appeal findings. The EAT found that the tribunal had also erred in law by failing to make a declaration that NSL Ltd was jointly and severally liable for the breach of TUPE. NSL's cross appeal was dismissed, as questions of apportionment between respondent and appellant were a matter for the courts rather than the tribunal under the provisions of the Civil Liability Contribution Act 1978.
This decision is good news for employers and it is helpful that the EAT has made it clear that the maximum award can only be made where there has been no consultation whatsoever. It will be interesting to see what award is made when the case is reconsidered by the tribunal. This decision should also act as a reminder to anyone involved in collective redundancy or a TUPE transfer that information about agency workers should be provided to employee representatives, in order to avoid breaching the information and consultation requirements. Lastly, it demonstrates how expensive a mistake can be: the amount at stake of the awards concerned was noted by the EAT to be something in the order of £850,000.