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 Limited v GMB and others [2004] IRLR 400). This is why it is irrelevant, when calculating the award, whether employees lost out financially as a result of a failure to consult collectively. 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.





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 Barnet v UNISON [2013] UKEAT 0191/13/1912). The 90-day maximum applies even if the minimum consultation period was 30 days (Newage Transmission v TGWU EAT/0131/05). The 90-day maximum award remained unchanged when the minimum consultation period was cut from 90 to 45 days (see page 390).





Except where an employer is insolvent, protective awards are calculated using actual earnings and there is no statutory cap. The need to base compensation on actual earnings is a requirement of EU law and as such, is one of the laws most at risk following the decision to leave the EU (see box pages 18-21). Using uncapped earnings means that in large-scale redundancies involving a solvent employer, protective awards can be very large indeed. 


The threat of a protective award can be an effective weapon to force a reluctant employer to consult properly with a recognised union. Employer pension contributions must be included when calculating a week’s pay for the purposes of a protective award (University of Sunderland v Drossou [2017] UKEAT/0341/16/RN).