Where an employer proposes to make 20 or more employees redundant within a period of 90 days or less, a duty to collectively consult with the affected employees’ representatives is triggered. Failure to collectively consult may result in a Tribunal making a “protected award” of up to 90 days’ pay; this award is intended to punish the employer and is not based on the loss suffered by the employees.
In a recent Employment Appeal Tribunal (EAT) case, the EAT considered the limited circumstances in which employers may be able to rely on an exception to the duty to collectively consult i.e. if “special circumstances” mean it is not reasonably practicable to consult collectively. The governors of a school had determined in February 2013 that the school would have to close if pupil numbers did not improve. In April 2013 pupil numbers for the following year were confirmed and the governors took the decision to close the school at the end of the academic year. The governors had not taken legal advice and were unaware of their obligations to collectively consult; employees were simply given one term's notice of dismissal, in accordance with their contractual entitlement.
The school foundation sought to rely on the special circumstances exemption to avoid a protective award. They argued that it would not have been reasonably practicable to consult in February 2013, as the potential closure of the school would have been leaked as a result, resulting in parents removing their children. Furthermore, once numbers were confirmed in April 2013, the school needed to give notice almost immediately to avoid triggering the requirement for a further term's notice to be paid.
The EAT, upholding the Tribunal’s decision, did not accept these arguments. These “special circumstances” were plainly hypothetical; they could not have been considerations at the relevant time as the governors had been entirely ignorant of their obligations. For the exception to apply, said the EAT, there must be a contemporaneous assessment of whether or not it is practicable to consult.
The EAT further upheld the Tribunal’s decision to award the maximum 90 day protective award, agreeing that the school foundation could not rely on ignorance of its obligations as a mitigating factor because it had taken a “reckless decision” not to seek legal advice.