In Shanahan Engineering v Unite the EAT recently considered the level of protective award payable to 50 employees who had been made redundant with no prior consultation, in breach of s.188 Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).
The employer was supplying employees to work on a large-scale construction project, building two generators for a customer. On virtually no notice, the customer stipulated that the work should be done on the two generators in sequence rather than concurrently. In practice this meant that half the workforce had to be made redundant within a very short space of time. The employer argued that these were 'special circumstances' within the meaning of s 188(7) TULRCA, meaning that it was not reasonably practicable for it to comply with the requirement to consult. The employment tribunal disagreed and awarded the claimants the maximum 90 days pay each by way of a protective award. The employer appealed.
The EAT split its decision.
It dismissed the employer's appeal on 'special circumstances'. The employer may have been forced to change its plans on no notice but it was entirely within its own power to decide how many redundancies there should be, who should be selected and when. Furthermore, these were all proper matters for consultation with the workforce.
However, the EAT thought that the 'special circumstances' could be applied as a mitigating factor in deciding the level of protective award which was meant to focus on the seriousness of the employer's default. In this case, the tribunal should have considered the surrounding circumstances (including the fact that consultation, if it had occurred, would have been completed very quickly) and not awarded the maximum amount.
Point to note –
- This case highlights the difficulties an employer is likely to face in avoiding liability for failure to consult by relying on the 'special circumstances' defence. However an employer may well be able to avoid liability for the maximum protective award where consultation, if it had been carried out, would have been completed within a very short period (although the EAT emphasised that there is no general rule that the award should be tailored to the length of time consultation would have taken).
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