Legal update: Compensation levels for failure to consult collectively where some consultation has occurred

13 May 2014

The case of London Borough of Barnet v Unison and another considered what the starting point should be for calculating compensation for failure to consult collectively.  The EAT has held that the starting point of the maximum award should only be used where the employer had not engaged in any consultation at all.

Barnet made collective redundancies, and two transfers of staff pursuant to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). Barnet undertook some consultation to comply with its relevant collective consultation obligations.  However, it admitted that the information provided did not comply with the legislation, in particular in relation to agency workers.  Where a Tribunal finds a complaint for failure to consult collectively on redundancies well founded, it may make a “protective award” of up to 90 days’ pay.  TUPE contains similar provisions (although the compensation is not called a protective award), and provides for a maximum award of 13 weeks’ pay.

The Tribunal made three awards: one for failure to consult collectively on the redundancies, and two for failure to inform and consult on the two separate TUPE transfers.    In making these awards, the Tribunal started from the applicable maximum awards and worked backwards.  The Tribunal took certain factors into account, such as the fact that the information required was relatively easy to produce and that Barnet had been aware that the Union wanted this information and it was central to the consultation process.

Barnet appealed, and the EAT upheld the appeal. The EAT held that the Tribunal had erred in identifying the “starting point” for calculating the protective award and the TUPE compensation as the maximum. The Court of Appeal (in Susie Radin) and the EAT had previously suggested that, in relation to collective redundancies,  the starting point of 90 days was the proper approach where there had been no consultation.  In Todd v Strain, the EAT said “it should not be applied mechanically in a case where there has been some information given and/or some consultation”.  This guidance applies equally in the case of a failure to consult under TUPE.

The EAT accepted that the Tribunal had difficulty in understanding how it should approach the question of a protective award.  It had regard to the appropriate authorities, but it was “not quite sure where we should start if we do not start from the maximum and work down”.  The Tribunal also said that “given in our view this is a relatively serious failure we do indeed start with the maximum”.  However, these comments were crucial to the Tribunal’s understanding of its role, and amounted to an error.

Therefore, even though the Tribunal had awarded less than the maximum in this case, it had erred by stating that it started its considerations by looking at the maximum award.  This case did not, however, provide guidance as to what the correct starting point may be in cases where there has been some consultation.  The case has been remitted to the Tribunal, and it will be interesting to see whether the level of the awards is reduced.

Share insightLinkedIn Twitter Facebook Email to a friend Print

Email this page to a friend

We welcome views and opinions about the issues raised in this blog. Should you require specific advice in relation to personal circumstances, please use the form on the contact page.

Leave a comment

You may also be interested in:

Skip to content Home About Us Insights Services Contact Accessibility