Advice For You

Protective Award Claim

If your employer fails to consult with you about a collective redundancy situation, you may be entitled to a Protective Award.

What is a Protective Award?

A Protective Award is an award of compensation of up to 90 days’ gross pay, that can be awarded by an Employment Tribunal, for failure by your employer to collectively inform and consult you where you have been dismissed on the grounds of redundancy. This applies to the dismissals of 20 or more employees, within a 90-day period from the same establishment.

In the event of such dismissals, your employer would have a duty to consult with a recognised trade union or an elective employee representative (if any) at least 30 days prior to any dismissal taking effect.

It is important to note that, unlike with redundancy payments, you do not need to have been employed for two years to make a Protective Award claim.

How much protective award compensation could you be entitled to?

Where there has been a complete failure by the employer to consult with employees regarding their dismissal, the tribunal is likely to award a payment of 90 days’ pay to each employee. This is compensation for your employer’s failure to have started consultations with you about the redundancy situation.

Is a Protective Award capped?

In the event that your employer cannot pay your award, the UK Government guarantees 8 weeks' pay, capped at £643* per week less any arrears of pay you may have received from the Redundancy Payments Office. So in this situation, you could receive up to £5,144**

How long do you have to bring a Protective Award claim?

There is a time limit of three months less one day for bringing a Protective Award claim.

This limitation period commences on the date the last person who was dismissed by reasons of redundancy within the 90-day period had their contract of employment terminated. You would have to commence the ACAS early conciliation process before commencing a claim in the Employment Tribunal.

How to claim a Protective Award

Unlike a claim for redundancy and arrears of pay and holiday pay (which typically involve the submission of an online form to the Insolvency service), in order to obtain a protective award employees must commence legal proceedings in the Employment Tribunal. As with any legal process, employees are best advised to seek legal assistance. For example, the precise legal basis of the claim needs to be set out in a document lodged at the Employment Tribunal called an ET1. Various procedural steps need to be complied with. Responses may be filed to the claim and a hearing may be fixed before an Employment Judge. Most employees do not feel confident dealing with such a process without legal support and assistance.

How much does a Protective Award cost?

At Pearson Solicitors we offer a free initial call to discuss your redundancy and whether you may be eligible for a Protective Award. Our specialist employment solicitors will guide you through the process and provide reliable legal advice on your situation.

Our solicitors have an excellent success rate in protective award claims and can operate on a no-win, no-fee basis, meaning that if we are unable to recover an award on your behalf, there is no fee payable.

Typically, our fees are based on a percentage of the compensation we recover on your behalf.  The more employees we act for, the lower the percentage will be in relation to our fees per individual.

* Weekly pay if made redundant on or after 6th April 2023, ** Maximum award if made redundant on or after the 6th April 2023. If you were made redundant before 6 April 2023, these amounts will be lower.

The Government guarantees a proportion of any successful protective award claim. That is capped at 8 weeks’ wages less any arrears of wages already paid to you by the Insolvency Service.  There is a cap on the weekly wage you can recover which is currently £643*.  That means that the maximum amount the government guarantee is £5,144**.

Additionally, employees can claim the balance of their award as an unsecured creditor in the company’s administration/liquidation process.  Whilst most of the time a company will have insufficient assets to pay such claims, this is not always the case.

We have had success in a number of cases in recovering additional sums of money through an administration process, which is sometimes greater than the amount the government guarantees.

If a protective award judgment is obtained in the same tax year as you were made redundant, income tax is normally deducted by the Insolvency service at the rate of 20%, together with national insurance. If the award is made in a different tax year, then no income tax is deducted at source from the award guaranteed by the government.

You should check whether the Union was recognised by the company for collective bargaining purposes and redundancy consultation.  If they were, then only the Union can bring a claim on behalf of all those employees who formed part of the collective bargaining unit, irrespective of whether they were members of the Union.

If the Union was not recognised, then individuals must bring claims themselves, although the Union should assist you in such claims if you were a member.

The timescale varies depending on a number of factors.  A claim must be commenced within 3 months of the date of the last redundancy dismissals.  Once commenced, a claim may take between 3 – 9 months to be determined by the Tribunal, but much depends upon which particular Tribunal deals with your case.

Another contributory factor to any delay is whether ant response is filed to your claim and whether a Tribunal lists a hearing to determine the claim.

How can we help

Our solicitors have years of experience dealing with protective award claims and deal with your claim right from the outset.  Alan Lewis, who heads the protective award team, is one of only a few solicitors who is nationally recognised in the Legal 500 as a leading individual in the field of employment law acting for employees.

For further information on making a protective award claim or to discuss your redundancy situation please contact us at 0161 785 3500 or email enquiries@pearsonlegal.co.uk