Major legislation changes to Protective Award Claims

The Government’s Employment Rights Bill aims to make big changes in workers rights and pay, and there has been a lot of press coverage and commentary about its significant improvements such as: day one rights for unfair dismissal, statutory sick pay and protection from fire and rehire, which have all grabbed the headlines, although much of it will take up to two years to come into action.

Workers right to a protective award claim

However, buried away in the 210 pages of the relevant bill, (pages 34-36 to be precise) there are two clauses that will have a very significant affect on the rights of employees who may be entitled to pursue claims for protective awards.

A protective award is a claim for compensation where an employer has failed to consult with elected representatives of the work force prior to making redundancies and further information can be found on our protective award claims page.

This change in legislation will affect thousands of employees, particularly in circumstances where their company ceases to trade and goes into liquidation or administration.

Since the European Court of Justice’s decision in a case involving the administration of Woolworths, employees affected by multi-site closures/redundancies have often found it difficult to pursue claims for protective awards.

Protective award for failure to consult

The duty to collectively consult with employees is only triggered if an employer is proposing to dismiss 20 or more employees at one establishment. The biggest hurdle for employees in large scale multi-site redundancies is where an employer operates from many separate sites and where some of the sites/shops/offices employ less than 20 employees.

Many businesses operate from multiple sites where there are typically less than 20 employees employed at such sites. This is commonly the case in hospitality and retail where the chain operates in numerous cities and towns throughout England, Wales and Scotland. Woolworths, Comet and Ted Baker are some of the many examples.

“Whilst typically some employees at the head office and warehouses of such companies can bring claims, the majority of employees employed at the individual shops and stores have often been left without remedy,” said Employment Law Partner and Protective Claims Specialist, Alan Lewis, who has worked with clients across a wide variety of industries on successful claims.

“This can obviously be a significant frustration for thousands of workers, but now the good news is that the frustration will end when the Employment Rights Bill comes into force. From that date, employees will be entitled to aggregate the number of redundancies between shops, stores and offices when establishing a duty upon their employer to collectively consult with them.”

“In reality what this means is that employees employed in a shop, store or office with less than 20 employees will still be able to pursue a claim for a protective award if the total number of employees made redundant within the same round of redundancies business wide exceeds 20,” said Alan, who in his career has secured protective claim awards for thousands of employees, and worked on multiple class actions.

It is important to note that in some circumstances employees can argue that the employees employed at satellite stores and offices should be treated as one establishment along with the head office of a particular company.

“We have been successful in pursuing such arguments in many cases, however, the argument becomes more difficult where there are individual branch or store managers responsible for the operational day to day control and management of a satellite store or office. I am pleased to say such arguments will now become a thing of the past,” said Alan Lewis.

How can we help?

Pearson Solicitors and Financial Advisers specialise in helping redundant employees make claims. For legal advice on making a protective award claim contact our employment law solicitors on 0161 785 3500 or email enquiries@pearsonlegal.co.uk

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Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.