When an employer fails to consult staff during a collective redundancy exercise (20 employees or more), it will have a ‘protective award’ made against it. The award is not to compensate the employees but to punish the employer for its failure. The fact that employees may not have suffered any loss is irrelevant. The award is for a maximum of 90 days’ pay per employee. Although an employer can refer to ‘special circumstances’ meaning it couldn’t properly follow the process, if there has been a total failure to consult, it is unlikely that the maximum award will be reduced.
In the case of E Ivor Hughes Educational Foundation v Morris, the Employment Appeal Tribunal considered an employer’s argument about special circumstances. Here though the employer had not taken legal advice and did not at the time of the dismissals know it was under an obligation to consult. At tribunal it produced arguments as to why consultation could not have taken place had it known about the duty. The EAT refused to accept these arguments. They were not considered at the time and were not relevant. The EAT stated the law ‘is not concerned with what an employer might, with hindsight, have thought about consultation if the employer had addressed its mind to the question’.
Interestingly, the employer’s ignorance about consultation was down to ‘a reckless failure to consult relevant legal experts’. So the moral of the story… call a solicitor!