Employer’s duty to consult - Failure to consult union - Affected employee seeking protective award against employer

Independent Insurance Co Ltd (in provisional liquidation) v Aspinall and another: EAT (Judge Serota QC, Mr D Bleiman, Mr J R Rivers): 12 April 2011

The employer, an insurance company, went into provisional liquidation. It had 1,550 employees, of whom 971 were to be made redundant almost immediately. The employer failed to comply with its obligations to consult and to provide information to either employee representatives or trade union representatives, or to arrange for the necessary elections pursuant to sections 188-189 of the Trade Union and Labour Relations (Consolidation) Act 1992 (the act).

In a claim by an affected employee, the employment tribunal decided that in circumstances where sections 188-189 of the act applied, and as there was no trade union representative nor an elected representative of the employees affected by possible redundancy, one affected employee might seek a protective award not only for himself but for all other persons similarly affected. The employer appealed to the Employment Appeal Tribunal. The appeal would be allowed.

Section 189(3) of the act stated that a protective award was an award for employees in respect of whose dismissal or proposed dismissal the employer had failed to comply with a requirement of section 188 of the act. On a purely literal construction, that provision might be read as giving any claimant the right to seek a protective award covering every employee in respect of whom the employer had failed to consult. That, however, was not the case.

The provision had to be read in its context: a personal claimant might obtain a protective award for himself; a representative claimant might obtain a protective award for those whom he represented in litigation; and a trade union might obtain a protective award for all the employees in its bargaining unit (whether they were members of the union or not). The award a personal claimant obtained might not be stretched to cover those outside its bargaining unit whether the members were members of the union or not, and whether the outsiders were represented by some other person or union or not. It was a case of each to his own (see [35] of the judgment).

The act conferred representative rights. The employer had a responsibility to consult, however where there was no recognised trade union or elected representative, the obligation of the employer to consult on section 188 matters was required to be ­fulfilled by consultations with each individual employee.

There was ­nothing to suggest that an individual applicant could be considered to represent all other applicants in similar circumstances unless he had been elected. The legislative history suggested that it was intended that the right should be limited to those persons who had been represented by a trade union or employer only, or to claim in their own right only (see [37], [52] of the judgment).

In the instant case, the effect of the decision of the tribunal was hopelessly anomalous because it would enable persons to benefit from the judgment where the employees’ cases had failed to establish a breach (see [52] of the judgment).

Ian Gatt (instructed by Herbert Smith) for the employer; the employee presented written submissions.