When the Code of Practice on Dismissal and Re-engagement came into force in July this year, a notable omission from the list of claims to which uplifts could be applied for non-compliance was protective awards. Protective awards are awards of (currently) up to 90 days’ gross pay (uncapped) which can be made by tribunals where an employer has failed to comply with its collective consultation obligations in a redundancy situation involving 20 or more employees at any establishment. 

The The Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024 has added failure to follow collective consultation requirements, under s189 Trade Union and Labour Relations (Consolidation) Act 1992, to the list of claims where an adjustment to compensation of up to 25% can be made for failure to follow a relevant code of practice. The Order comes into force on 20 January 2025.

The upshot of this change for employers is that, from 20 January 2025, when assessing the financial risk associated with a failure to comply with collective consultation obligations in a redundancy situation, ‘90 days gross pay’ per employee will no longer be the worst-case scenario. The likelihood that the statutory code of practice on dismissal and re-engagement has also been breached will also need to be considered – potentially adding up to 25% to the previous worst-case scenario figures. 

This change also needs to be placed in context of the other changes which the government are proposing in this area. The Employment Rights Bill proposes to bring more redundancy situations within the ambit of collective consultation by removing the concept of ‘establishment’ – so that the number of proposed redundancies need to be calculated across the business and not just on a site-by-site basis, when looking at whether 20 or more are proposed. The government has also recently completed a public consultation seeking views on increasing the level of protective awards, either to 180 days or by removing the cap on the protective award entirely. 

The stakes on collective consultation are getting higher and are likely to get higher still in the coming months and years.

Speak to Jon Dunkley

Jon is a Partner at Wollens and can advise you. Contact Jon via email jon.dunkley@wollens.co.uk or call 01271 341021.

You can also complete an online enquiry form. One of the Wollens team will contact you as soon as they are available.