Calculating the protective award

The purpose of a protective award is not to compensate employees for their loss but to punish the employer for failing to consult (Susie Radin v GMB and others [2004] IRLR 400). For this reason, it is irrelevant whether or not individual employees have lost out financially as a result of the failure to consult. It makes no difference, for example, that they have found another job or received state benefits. As the award is punitive and not compensatory, what matters is the seriousness of the employer’s breach of its consultation duty.

The award can be up to 90 days’ pay. Where there has been a complete failure to consult, the tribunal should start with the maximum award of 90 days’ pay and only reduce it if there are mitigating circumstances (Todd v Strain [2010] UKEAT 0057/09/1606, London Borough of Barnett v UNISON [2013] UKEAT 0191/13/1912). This maximum of 90 days applies even if the minimum consultation period was 30 days (Newage Transmission v TGWU EAT/0131/05). This remains unchanged despite the cut in the minimum consultation period from April 2013.

Except in cases of insolvency, protective awards are calculated using actual earnings and there is no statutory cap. This means that especially in large-scale redundancies, protective awards can be very large indeed. The threat of a protective award can be a potent weapon to force a reluctant employer to engage in proper consultation with a recognised union.