E Ivor Hughes Educational Foundation v Morris & Ors

Where an employer has adopted a clear, albeit conditional, intention to close an undertaking and the condition is unlikely to be met, the duty to consult on proposed collective redundancies may arise before the final closure decision.

The special-circumstances exception in section 188(7) of the Trade Union and Labour Relations (Consolidation) Act 1992 concerns the actual circumstances at the relevant time. It does not permit an employer to rely on a retrospective account of what it might have thought had it considered consultation.

A protective award sanctions the seriousness of the employer's default. Absence of employees' actual loss cannot mitigate an otherwise just and equitable award. Procedural fairness requires each party to have a fair opportunity to meet evidence on a material issue.

The employer charity closed one of its schools following declining pupil numbers and dismissed its teaching staff for redundancy. It had not consulted staff representatives before giving dismissal notices.

The Watford Employment Tribunal made a 90-day protective award for breach of the collective-consultation duty. It also held that the dismissals of three employees were unfair because a vacancy at another school had not been ring-fenced, and assessed each employee's chance of obtaining it.

The employer appealed the date on which the consultation duty arose, the rejection of special circumstances, the length of the protective award, and the procedure used to decide the employees' chances of securing the alternative post.

1. The appeal was allowed in part. The challenge to the 90-day protective award failed. The appeal succeeded only on the procedural fairness of the findings about three employees' prospects of obtaining an alternative post.

2. The Tribunal was entitled on the evidence to find that, on 27 February 2013, the governors had decided that the school would close unless pupil numbers improved. That was a clear, though conditional, intention. On either of the possible tests discussed for the timing of collective consultation, it triggered the duty under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992. It was unnecessary to decide conclusively which test was correct.

3. Section 188(7) provides a limited exception based on actual, out-of-the-ordinary circumstances which made consultation not reasonably practicable at the time. It is not directed to a later hypothetical business assessment where the employer did not consider consultation at all. The Tribunal was entitled to reject the asserted risk of disclosure to parents and the asserted benefit of waiting. It was also entitled to conclude that no special circumstances existed.

4. Under section 189(4), the protective award is directed to the seriousness of the employer's default, not compensation for individual loss. Applying [2004] ICR 893, the Tribunal was entitled to start with the maximum where there had been no consultation and reduce only for genuine mitigation. The employees' lack of actual loss could not itself mitigate the award. The complete failure to consult, arising from a reckless failure to obtain relevant legal advice, justified 90 days.

5. In any event, any error about February was immaterial. The employer admitted that the duty arose by 25 April, did not consult then, and did not appeal the finding that the need to avoid a further term's notice was not a special circumstance.

6. The Tribunal acted unfairly when it admitted late employee evidence concerning individual prospects of the alternative post, while the employer's responding witness was unavailable, but then made percentage findings without allowing the employer to answer that evidence. The findings on those prospects were remitted to a differently constituted Tribunal. The finding that the vacancy should have been ring-fenced remained undisturbed.

• Employment Appeal Tribunal: allowed the appeal only as to the percentage prospects of three employees obtaining alternative employment, and remitted that issue to a differently constituted Tribunal.
• Watford Employment Tribunal: on 17 August 2014 made a 90-day protective award and found the dismissals unfair in respect of the failure to provide the opportunity of suitable alternative employment.