Calculating the protective award

A tribunal that finds a failure to inform or consult must make a declaration to that effect and can award “appropriate” compensation “to such “descriptions” of “affected employees” as may be specified in the award” (Regulations 15(7) and (8)). There is very little case law on the meaning of “description”. As regards who is an “affected employee”, see page 38.

A recognised union can only claim a protective award for employees within its bargaining unit (Transport & General Workers Union v Brauer Coley [2007] ICR 226).

An individual who brings a claim for failure to consult (i.e. where no reps have been elected) can only claim a protective award for his or her own benefit (Independent Insurance v Aspinall [2011] UKEAT/0051/11/CEA).

The maximum amount of compensation for any failure to inform and/or consult is 13 weeks’ pay.

Unless the employer is insolvent, a “week’s pay” is not subject to any statutory cap. Instead, the award is calculated using actual gross weekly pay. As a result, awards for failure to inform or consult under TUPE can be very large indeed.

Awards where the employer is insolvent are more limited. Like all payments by the Redundancy Payments Office, protective awards are capped at a maximum weekly rate which increases each year (£450, 2013-14). The RPO treats the protective award as wages. Since wages are already capped at a maximum of eight weeks, this means that where an employer is insolvent, only the first 56 days of any protective award can ever be paid out. The payment is also reduced by the amount of any wages already paid out under the scheme. Online guidance is available from the website of the Insolvency Service.

www.bis.gov.uk/assets/insolvency/docs/forms/redundancy-payments/rp1-factsheet.pdf