Protective awards are punitive, not compensatory

In a recent decision, the Employment Appeal Tribunal (EAT) has reaffirmed that, when assessing protective awards made under the TUPE Regulations for failure to inform and consult prior to the transfer of an undertaking, an employment tribunal’s focus should not be on compensating the employee, but on punishing the employer.

In this case, the employer called an election at 14.00 with an instruction that voting was to be completed by 17.00 the same day. Consequently, the EAT found that the employer had not complied with its duty to take reasonable steps to ensure that the election was fair, and as such, upheld the employment tribunal’s decision to make a protective award against the employer.

The EAT went on to state that the punitive purpose of the protective award is to ensure that employers remain mindful of their obligations to inform and consult, particularly in circumstances in which there may be time pressures. However, where there is evidence that an employer has taken at least some steps to comply with its obligations, the punishment should not be as great as for an employer who has taken no steps at all.

(Case name: Shields Automotive v Langdon & Brolly UKEATS/0059/12/BI)

Full case can be found here:

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