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Collective Redundancies - a Ł1m liability

In this case, our client, after years of struggle, wished to cease manufacturing in the United Kingdom. As a result, they embarked on necessary consultation with the recognised trade union and employees in respect of compulsory redundancies.

The company had carried out a number of redundancy exercises in the past all with the support and agreement of the trade union concerned.

In this case, the trade union, for its own reasons, decided the consultation was not adequate. It is possible for a trade union to bring a claim for what is known as a protective award in an employment tribunal where there has been a failure by the company to consult adequately with the recognised trade union over certain matters required under the statute.

We estimated that had the union succeeded in their claim in entirety, the cost to our client would be some Ł1.4m. Not unnaturally, we prepared extensively for this and although confident of the outcome, the sums involved were considerable and could easily have led to the failure of our client’s operation.

Fortunately, at lunch time on the first day, the Tribunal Chairman advised the union that he did not think they had a case and may be liable for the employer’s expenses if they proceeded. As a result, the trade union decided to withdraw their claim to the employment tribunal.

The strength of our case, our preparation and presentation clearly influenced the tribunal in intervening so early. The prospect of losing the case for our client did not bear thinking about.