RSS Feed

Legal Updates

More Articles: Latest Popular Archives

90 day protective award imposed for failing to consult over redundancies

The EAT’s decision in E Ivor Hughes Educational Foundation v Morris & Ors demonstrates just how expensive the penalty can be when an employer breaches the obligation to consult collectively about redundancies and that saving money is not an excuse for failing to consult, nor is ignorance of the law.

The numbers of pupils attending the School had declined by nearly 20% in 6 years. At a meeting on 27 February 2013, the Governors decided to close the School unless numbers increased. The final decision to close was taken on 25 April 2013 when pupil numbers for the 2013 to 2014 indicated a further decline and an operating deficit of £250,000. The Governors decided to close the School at the end of the summer term of 2013. Because staff were entitled to a term's notice, in order to save an extra term's salary, the Governors gave the staff notice of dismissal by reason of redundancy on the 29 April 2013 so that their contracts would end on 31 August 2013. No consultation took place with the staff prior to dismissal as required under S.188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), as it appeared the Governors did not know that they had a legal obligation to consult and did not seek legal advice. 24 staff claimed that the School was in breach of its obligations under S.188 TULRCA.

The EAT held the tribunal was entitled to conclude that the obligation to consult prior to dismissing staff as redundant under S.188 TULRCA arose on 27 February 2013. The decision on that date to close the School, unless numbers increased, which was considered to be unlikely, was either a fixed, clear, albeit provisional intention to close the School or amounted to a strategic decision on changes compelling the employer to contemplate or plan for collective redundancies. On either analysis, the duty to consult arose on that date. The tribunal was also entitled to reject the employer’s argument that the need to serve notice in April in order to avoid giving an extra term's notice to the staff were special circumstances which made it not reasonably practicable to consult and that a protective award of 90 days gross pay was appropriate, particularly given that there had been no consultation and the failure to consult resulted from the reckless failure to consult legal experts on the employment implications of the closure. 

Content Note

The aim is to provide summary information and comment on the subject areas covered. In particular, where employment tribunal and appellate court cases are reported, the information does not set out full details of all the facts, the legal arguments presented by the parties and the judgments made in every aspect of the case. Click on the links provided to access full details. If no link is provided contact us for further information. Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, SM&B cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.

Receive more HR related news and content with our monthly Enewsletter (Ebrief)