Award of Seven Weeks’ Pay for Election Failures Too High

Failings relating to the election process for employee representatives were technical breaches of the information and consultation requirements and an award of seven weeks’ pay was excessive.

In Shields Automotive Ltd v Langdon, the employees were invited to elect two representatives for TUPE information and consultation purposes. The invitation was issued at 2pm and they were given until 5pm the same day to nominate candidates and cast votes. There were 18 employees affected by the transfer, one of whom chose not to vote in protest at the short timescale and one of whom was unable to vote as he was not working that day. 

The election produced a clear winner but there was a tie between two employees for second place. The employer selected between these two, deciding that it was not appropriate for one of them to be a representative as he was not going to be at work on the day of the consultation meeting. 

The two employees who had not voted brought tribunal claims, arguing that there had a breach of the information and consultation obligations. The employment tribunal did not criticise the quality or content of the consultation itself, but upheld the claim that the employer had failed to ensure a fair election process. The tribunal awarded seven weeks’ pay to the employee who had not been able to vote and two weeks’ pay to the other. The employer appealed.

The EAT upheld the tribunal’s decision that the employer had failed to ensure a fair selection process. The employer had not provided a satisfactory explanation for rushing the election process which had resulted in one of the employees being unable to vote. In addition, employee representatives had to be elected by the affected employees and although the employees had had a voice in the selection, the ultimate selection of the second candidate had been made by the employer.

However, the EAT overturned the tribunal’s award of seven weeks’ pay as it considered this excessive. The purpose of an award is to punish the employer, not to compensate the employee and the tribunal should focus on the seriousness of the employer’s breach. The fact that there had been full consultation, albeit not entirely with elected representatives, meant that this was more along the lines of a technical breach which did not justify such a large award. It substituted an award of three weeks’ pay. 

This case is a useful reminder of the correct approach to assessing awards where there has been a breach of information and consultation requirements, whether in connection with a business transfer or collective redundancies. The correct approach is to start with the maximum award of 13 weeks’ pay (90 days’ pay for collective redundancies) and then look for mitigating factors. In this case the fact that there had been full consultation, albeit not with properly elected representatives, resulted in a substantial reduction in the award. Employers who fall foul of election requirements but who otherwise comply with their information and consultation obligations should not face having to pay a the maximum award and should be able to achieve a significant reduction.