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The “special circumstances” defence
A tribunal should make a protective award unless the employer can point to special circumstances making it not reasonably practicable to consult. Even if the employer can demonstrate special circumstances, it must still show that it took all reasonably practical steps to comply (section 189(6) of TULRCA). Tribunals interpret the defence narrowly. Especially where they find evidence of gradual deterioration so that the employer can see the writing on the wall, the defence is unlikely to succeed.
Special circumstances must be something unforeseen or unexpected, out of the ordinary run of commercial or financial events. In USDAW v Leancut Bacon [1981] IRLR 295, the sudden withdrawal of a prospective purchaser, forcing the company into receivership, qualified as a special circumstance. By contrast, the employer in the following case failed to establish the defence:
After losing its main contract, the employer announced redundancies without consultation, arguing that the loss of the contract was a “special circumstance” relieving it of the duty to consult. But the EAT held that the company had taken a calculated commercial decision to make redundancies at the earliest opportunity, without consultation or considering alternatives.
Industrial Chemicals v Reeks and others UKEAT/0076/04
Special circumstances do not provide an absolute defence to a claim for a protective award but they can reduce its size, or even in some circumstances eliminate the award altogether, depending on the employer’s efforts to consult effectively in the time available (see, for an example, Shanahan Engineering Limited v Unite the Union [2010] UKEAT/0411/09/DM).
The fact that employees would have lost their jobs anyway whether or not there had been collective consultation is irrelevant to the calculation of a protective award. So is the fact that employees have found another job.
When deciding on the seriousness of the failure to consult, a tribunal can take into account consultation that took place before the proposal to dismiss was made (Amicus v GBS Tooling Ltd UKEAT/0100/05, [2005] IRLR 683).