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How do you calculate a protective award?

Posted on 26th March 2014
Case law

The EAT has confirmed that the maximum protective award is 90 days (or 13 weeks) is only the starting point for calculating an award where there has been no consultation at all. Beyond that ‘the length of the protective award is a matter for the tribunal’ who has a ‘wide discretion to what is just and equitable’.

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only if there is no consultation the starting point is the maximum award

London Borough of Barnet v Unison and another 2013

The facts

In October 2011, the Borough proposed to delete 77.5 full time posts, placing at risk 97 individuals. It started, as it was required to, a 90 day consultation period under the Trade Union and Labour Relations (Consolidation) Act 1992. There were only around 16 dismissals, which took place in March 2012.

In 2012, in April and May, the Borough also transferred staff to Barnet Homes and NSL Limited under the Transfer of Undertakings (Protection of Employment) Regulations 2006.

Under the Act and the Regulations, the Borough had to provide certain information as part of its obligations to inform and consult. From October 2011, this included information about agency workers following the introduction of the Agency Workers Regulations 2010. The Borough did not provide this information and claims were brought under the Act and Regulations for protective awards. The Borough had complied with all other requirements.
 
The Borough accepted it had not provided the information about agency workers required under the Act and the Regulations. The only issue was the amount of the award. The employment tribunal awarded 60 days under the Act, and 40 days (the transfer to Barnet Homes) and 50 days (the transfer to NSL) under the Regulations.

The decision

Case law states that, only if ‘there is no consultation’, the starting point is the maximum award. Under the Act this is 90 days and under the Regulations it is 13 weeks pay.

The employment tribunal in this case used as a starting point the maximum award. The EAT said that this was not the correct approach. The Borough had partially complied and the employment tribunal should not have used the maximum award as the starting point. Unfortunately, the EAT did not give any guidance about where the employment tribunal should start nor did it determine the award. The EAT stated that the employment tribunal has a’ wide discretion to do what is just and equitable in the circumstances’ and how the tribunal assesses ‘the length of the protective period is a matter for the tribunal’.

The case has been sent back to the employment tribunal to decide this.

In practice

This case will at least provide an argument, during negotiations and at any hearing, for employers facing similar claims for non-partial compliance that the maximum award is not the starting point and that any award should be lower and in some cases substantially lower. The absence of any guidance beyond that is unhelpful and it remains to be seen if other cases fill this gap.

The employer in this case very nearly got it right but it still faced claims worth up to a maximum of £850,000. Admittedly Barnet was caught out by the introduction of the Agency Workers Regulations 2010, which may well be a factor the employment tribunal will take into account, but this case emphasises the importance of good, up to date legal advice at every stage.

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