What is Protective Award?

Full Definition

A protective award is compensation ordered by an Employment Tribunal where an employer has failed to comply with its legal duty to collectively consult employee representatives before making 20 or more employees redundant at one establishment within a 90-day period, as required under the Trade Union and Labour Relations (Consolidation) Act 1992. The law requires consultation to begin at least 30 days before the first dismissal takes effect where 20 to 99 redundancies are proposed, or at least 45 days before the first dismissal where 100 or more redundancies are proposed at one establishment, and consultation must be genuine and meaningful, covering ways of avoiding the redundancies, reducing the numbers involved, and mitigating the consequences for those affected, not simply informing staff of a decision already made. Where an employer fails to consult at all, consults for too short a period, or does not consult in good faith, affected employees (or their union or elected representatives on their behalf) can bring a claim to the Employment Tribunal for a protective award, which can be as much as 90 days' actual gross pay per affected employee -- uncapped by the normal statutory weekly pay limits that apply to other tribunal awards -- making a full protective award a very significant sum for larger redundancy exercises. The Tribunal has discretion over the actual number of days awarded, based on the seriousness of the employer's failure, and a protective award is separate from, and in addition to, any claim for unfair dismissal or a normal statutory redundancy payment, though tribunals will look at the whole picture including any partial or late consultation the employer did carry out. Worked example: a company with 150 employees at one site decides to make 30 of them redundant without any collective consultation process, dismissing them with immediate effect; because the threshold of 20 or more redundancies at one establishment is met, the 30-day minimum consultation period applied and was completely ignored, so each of the 30 affected employees can claim a protective award, and if the Tribunal awards the maximum 90 days' gross pay per employee, an employee earning £600 a week gross could be awarded roughly £7,700 in protective award compensation on top of any redundancy pay or unfair dismissal compensation separately due.

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