Shanahan Engineering Ltd v. UNITE

Under section 188(7) of the Trade Union and Labour Relations (Consolidation) Act 1992, the tribunal must ask whether special circumstances existed, whether they made compliance not reasonably practicable, and what steps towards compliance remained reasonably practicable. Special circumstances may excuse compliance with some consultation requirements but not others. An employer must still consult on matters it retains power to determine, including the number and timing of dismissals and mitigation. A protective award is a sanction, not compensation. Although the maximum period is an appropriate starting point after a complete failure to consult, the tribunal must assess seriousness in all the circumstances, including culpability, potential harm and mitigating special circumstances. The award is not to be calculated by reference to the time consultation would have taken.

Shanahan Engineering Ltd appealed against an Employment Tribunal judgment dated 18 June 2009. The tribunal found that Shanahan had breached section 188 by failing to consult Unite the Union before making about 50 employees redundant, but accepted that sudden instructions from Alstom made consultation at least 30 days before dismissal not reasonably practicable. It nevertheless found that some consultation remained practicable and made a 90-day protective award under section 189.

The appeal challenged both the finding of breach and the length of the award. The central issues were whether the special-circumstances defence excused consultation altogether and whether the circumstances could mitigate the protective award.

1. Section 188 duty. The appeal against the finding of breach was dismissed. Applying Clarks of Hove Ltd v The Bakers Union, [1978] IRLR 366, section 188(7) requires three questions: whether special circumstances existed; whether they rendered compliance not reasonably practicable; and whether the employer took all reasonably practicable steps towards compliance. Special circumstances mean something out of the ordinary or uncommon.
2. Reasonably practicable compliance. The sudden direction to reorganise the work and reduce labour made it not reasonably practicable to begin consultation 30 days before the dismissals. It did not remove the duty altogether. Shanahan retained decisions about how many employees to dismiss, when to dismiss them and what measures might mitigate the consequences. Those matters remained suitable for consultation. The instruction to act in accordance with the NAECI agreement was consistent with consultation rather than immediate dismissal. Howlett Marine Services v AEEU, [1998] UKEAT 253_98_2307, provided no material principle.
3. Protective award. The appeal on the award was allowed and the matter remitted. Under Susie Radin Ltd v GMB, [2004] IRLR 400, the award sanctions breach and is not compensatory. The maximum period may be the starting point after a complete failure to consult, but the tribunal must consider whether mitigating circumstances justify reduction. The special circumstances found here were potentially a powerful mitigating factor, even though they did not excuse the failure to consult. The tribunal must assess culpability, harm or potential harm, the absence of consultation, the short period in which consultation could have occurred and the existing agreed selection procedure. The award must not be linked mechanically to the consultation period.
4. The same tribunal was directed to reconsider the length of the award after hearing any further submissions or evidence, applying the guidance on remission in Sinclair Roche & Temperley v Heard, [2004] IRLR 763.

• Employment Appeal Tribunal: Appeal against the finding of breach dismissed. Appeal concerning the 90-day protective award allowed, and the length of the award remitted to the same Employment Tribunal for reconsideration.
• Employment Tribunal: Judgment dated 18 June 2009 finding breach of section 188 and making a 90-day protective award.