The EAT in Evans v Permacell has confirmed that the calculation of the amount of a protective award for failure by an employer to comply with the requirement to consult collectively should start at 90 days' pay where the minimum statutory consultation period is 30 days.
Employers are required to consult collectively when they propose to dismiss as redundant 20 or more employees at one establishment within 90 days or less (s 188 Trade Union and Labour Relations (Consolidation) Act 1992). Where an employer proposes to dismiss 100 or more employees, the minimum consultation period required is 90 days and at least 30 days' consultation is required where the proposal is to dismiss between 20 and 99 employees. A protective award of up to 90 days' pay per employee is awarded where an employer fails to comply with the statutory consultation requirements. There had been a number of cases which seemed to imply a link between the protective award and the minimum number of days' consultation which the employer was obliged to carry out, eg if 30 days' consultation was required, but not completed, the protective award should also be 30 days. The Court of Appeal in the Susie Radin case held that a protective award is designed to be punitive, not compensatory and that it should therefore start at 90 days' pay unless there are good reasons for awarding less.
Impact on employers
This case highlights the punitive nature of the protective award and the need for employers to set aside sufficient time to allow for collective consultation, where 20 or more employees are to be made redundant.