GMB v Susie Radin Ltd

The Court of Appeal upheld an Employment Tribunal's protective award under sections 188 and 189 of the Trade Union and Labour Relations (Consolidation) Act 1992, concluding that a protective award operates as a sanction for breach of the statutory consultation obligations rather than as compensation for individual loss. The court held that tribunals should focus on the seriousness of the employer's default in complying with s.188 when fixing the protected period, and that where there has been no consultation a proper starting point is the maximum 90-day protected period, reducing it only for clear mitigating circumstances. The court rejected the argument that the futility of consultation (or findings in unfair dismissal that consultation would have made no difference) is a ground for wholly or substantially reducing a protective award in collective claims.

The appellant, Susie Radin Ltd., closed its factory and dismissed 108 employees. The GMB and individual employees sought protective awards and other relief, alleging breach of the statutory duty to consult under s.188 of the Trade Union and Labour Relations (Consolidation) Act 1992. The Employment Tribunal (ET) found a complete failure to consult or to disclose the information required by s.188(4) and awarded the maximum 90-day protected period, while finding the dismissals fair for the purposes of unfair dismissal.

The employer appealed to the Employment Appeal Tribunal (EAT) which dismissed the appeal. Permission to bring a further appeal to the Court of Appeal was granted limited to issues about the protective award. The Court of Appeal was asked to decide the legal nature and proper approach to the exercise of discretion under s.189(4)(b): whether a protective award is compensatory or punitive/disciplinary in character, whether tribunals should have regard to individual loss or to the futility of consultation, and how the seriousness of the employer's default should be assessed.

The court analysed the statutory scheme and its origins in the Council Directives on collective redundancies. It concluded that the protective award is designed to secure compliance with the mandatory consultation obligations and to provide an effective, proportionate and dissuasive sanction for breach. The protected period is collective in character (applies to descriptions of employees) and is not linked to individual loss; accordingly tribunals should focus on the employer's default and its seriousness. Where there has been no consultation at all, a proper approach is to start with the statutory maximum (90 days) and reduce only for genuine mitigating circumstances. The court held that the ET had not erred in law in awarding the full 90 days on the facts of this case and dismissed the appeal.

Appeal dismissed. The Court held that a protective award under s.189 is a sanction to ensure compliance with the mandatory consultation duties in s.188 and is not designed to compensate individual loss. Tribunals should focus on the seriousness of the employer's default when fixing the protected period; where there has been no consultation the proper starting point is the maximum 90-day period, reducible only for mitigating circumstances. The ET's award of the full 90 days was not perverse on the facts.

Employment Tribunal (Newcastle-upon-Tyne) reserved decision 13 May 2002 finding breaches of ss.188 and 189 and awarding a 90-day protective period; appeal to the Employment Appeal Tribunal dismissed; permission to appeal to the Court of Appeal granted on limited grounds and appeal to this court ([2004] EWCA Civ 180) dismissed.