Wrong Starting Point Used for Calculating Protective Award

A tribunal had been wrong to use the 90 day maximum protective award as the starting point for calculating a protective award. The maximum should only be used as a starting point where the employer has done nothing to comply with its information and consultation obligations.

In London Borough of Barnet v Unison, an employment tribunal awarded a protective award in respect of the employer’s failure to provide agency worker information to the union. The employer had provided a good deal of information but only limited information about its use of agency workers. It had also undertaken a considerable amount of consultation in relation to the proposed redundancies and TUPE transfers. 

In the absence of any other guidance on the correct starting point for calculating the protective award, the tribunal followed the guidance in Susie Radin Ltd v GMB and started with the maximum. It made awards of 40, 50 and 60 days’ pay in relation to the different redundancy exercises and TUPE transfers. The factors it took into account when considering how far to reduce the maximum award included the fact that the required information was relatively easy to produce, had been produced in the past and was produced again shortly after the complaint had been raised. It also took into account the fact that HR knew the union wanted this information and that it was central to the consultation process. 

The employer appealed to the EAT which upheld its appeal. The tribunal had been wrong to use the maximum award as the starting point. This guidance only applies where the employer has done nothing at all towards compliance and should not be used where the employer has provided some information or carried out some consultation. The EAT remitted the case to the employment tribunal to consider the level of awards again.

It remains to be seen whether the employment tribunal will change the level of any of the awards when it comes to consider them again. It is still possible that the result will be the same. Nevertheless, employers should take some comfort from the fact that tribunals should only use the maximum as a starting point in cases where there has been no attempt to comply with information and consultation obligations.  Using the wrong starting point will give grounds for an appeal. 

However, the EAT did not give any guidance on the correct starting point in cases where there has been some attempt at compliance. In such cases, tribunals are left with the balance of the guidance in the Susie Radin case.  In that case the Court of Appeal said that the tribunal will need to bear in mind that the purpose of the award is to provide a sanction for breach and not to compensate the employees for loss suffered, and whilst a tribunal has a wide discretion to do what is just equitable in all the circumstances, it must focus on the seriousness of the employer's default, including whether the failure was deliberate.