Brown v G4 Security ( Cheltenham) EAT0526/09

The EAT imposed a penalty of £20,000 on G4 because they failed to conclude a valid agreement with employee representatives. The EAT took into account the employer’s mistake belief that it had complied with the Regulations and its prompt action when its breach had been established but refused to consider a plea of alleged financial hardship when imposing the penalty. G4 had failed to arrange a ballot of employees to elect ICE representatives in the belief that Mr Brown’s request in January 2009 to negotiate an agreement did not comply with Regulation 7 and therefore the ICE Regulations did not apply.

After proceedings were brought by Mr Brown, the Central Arbitration Committee confirmed that his request was a valid request and there was no pre-existing agreement. This meant G4 had no excuse not to arrange a ballot. On 20 October Mr Brown applied to the EAT for a penalty notice to be issued requiring G4 to pay a penalty to the Secretary of State for its non-compliance with the Regulations. The ballot finally took place in March 2010 and by April meetings with representatives elected in accordance with the ballot were due to take place.

Key point: Provided the employer can act diligently and not in a dilatory way after the determination as to the applicability of the Regulations any fine imposed by the CAC should be limited. G4’s breach was not merely technical but had persisted over 8 months and the entire workforce of 350 were affected so £20,000 was the proper fine.