Radin Ltd v GMB & Ors

A protective award for failure to consult about collective redundancies is a sanction for breach of the employer’s statutory obligations. It does not compensate employees for consequential loss. The employment tribunal has a wide discretion, but must focus on the seriousness of the default.

Where no consultation has occurred, the tribunal may start with the maximum protected period and reduce it only for mitigating circumstances. Relevant matters may include whether the breach was deliberate and whether the employer had legal advice. The supposed futility of consultation does not justify withholding or reducing an award. The duty is mandatory, collective in character, and requires meaningful consultation with a view to reaching agreement.

The company closed its clothing factory and made 108 employees redundant. The Employment Tribunal found that it had supplied none of the written information required by section 188(4) of the Trade Union and Labour Relations (Consolidation) Act 1992 and had undertaken no meaningful consultation with the appropriate representatives. It made a protective award for the maximum period of 90 days, while finding the dismissals fair because consultation would not have saved the jobs.

The Employment Appeal Tribunal dismissed the company’s appeal. Permission for a further appeal was limited to the protective award. The central issues were whether such an award was compensatory or penal, whether the supposed futility of consultation was relevant, and how a tribunal should determine the protected period.

1. Appeal dismissed. The Employment Tribunal had not misdirected itself and its selection of the maximum 90-day protected period was not perverse.

2. Peter Gibson LJ held that the purpose of a protective award is to sanction breach of the consultation obligations under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992. It is not an award of compensation for loss suffered by individual employees. The statutory scheme creates a collective award, contains no reference to compensation or loss, and directs attention to the seriousness of the employer’s default. This construction also gives effect to the requirement of European Community law for an effective, proportionate and dissuasive sanction.

3. The duty to consult is absolute and requires meaningful consultation with properly informed representatives, undertaken with a view to reaching agreement. The supposed futility of consultation may be relevant to an individual unfair-dismissal claim, but it does not excuse breach or reduce the seriousness of the default for the purpose of a protective award. Individual consequences would also be impracticable to assess fairly within a collective award.

4. Employment tribunals have a wide discretion to make an award which is just and equitable. Their focus must remain on the seriousness of the statutory default. Breaches range from technical defects to a complete failure to disclose information or consult. Deliberateness and the employer’s access to legal advice may be relevant. Where there has been no consultation, a proper approach is to begin with the statutory maximum and reduce the period only where mitigating circumstances justify doing so.

5. The compensatory approach in Talke Fashions and the notion in Spillers French of compensation for lost days of consultation were rejected. Guidance suggesting that futility or unilateral efforts to find alternative work could, despite a complete failure to consult, justify no award or merely a nominal award should no longer be treated as authoritative.

6. Laws LJ agreed with both reasoned judgments. Longmore LJ agreed that neither the statutory language nor the collective nature of the claim permitted futility to be considered. The company had received legal advice, had supplied none of the required written information, and had failed to conduct meaningful consultation. Those findings justified the maximum award.

• Court of Appeal (Civil Division): By [2004] EWCA Civ 180, unanimously dismissed the employer’s appeal and upheld the maximum 90-day protective award.
• Employment Appeal Tribunal: Dismissed the employer’s appeal, holding that the protective award was just and equitable in view of the clear absence of consultation.
• Employment Tribunal: Found breaches of sections 188 and 189 of the Trade Union and Labour Relations (Consolidation) Act 1992, made a 90-day protective award, and dismissed the employees’ unfair-dismissal complaints.