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‘Reckless failure’ to take legal advice results in huge pay out for employer

BY Kirstie Beattie
Employment Law & HR
BG Purple

A recent case has highlighted the importance of obtaining legal advice prior to taking weighty decisions in respect of employees continued employment.

The case of E Ivor Hughes Educational Foundation v Morris and ors concerned the duty of an employer to collectively consult in a redundancy situation. Peterborough and St Margaret’s School was operated by EIHEF. It had been experiencing a decline in numbers and resultantly a meeting of the school governors was called in February 2013 to discuss the projected number of pupils and the options for keeping the school open.

In April 2013, the number of pupils enrolled for the coming year was lower than predicted and a meeting was held to confirm the school’s closure. Staff were given notice of the closure and their resultant dismissal four days after the decision to close had been taken. The employees brought claims for unfair dismissal and for a breach of s.188 of the Trade Union and Labour Relations Act 1992. S.188 provides that where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, it must consult on its proposal with representatives of the affected employees.

The majority of cases involving s.188 consider the point at which the duty to consult is triggered. This case was somewhat different, however, as the employer had failed to consult entirely as the school governors had no knowledge of their legal obligations in this regard. Nevertheless, the employer attempted to rely on s.188 (7) which provides that an employer may not be obliged to collectively consult if ‘special circumstances render it not reasonably practicable’ to do so.

This defence was unequivocally rejected by the tribunal and by the EAT in the subsequent appeal. The duty to collectively consult was triggered in February and the line of argument based on ‘special circumstances’ had been artificial. The EAT upheld the tribunal’s decision to order the maximum 90-day protective award to each employee. It confirmed the position that the protective award is not intended to be compensatory – it is intended to be punitive.

Whilst the tribunal acknowledged that the breach had not been deliberate, it held that EIHEF’s ignorance of the law arose from a ‘reckless failure’ to seek legal advice. This ought to serve as a stark warning: employers owe a number of duties, both statutory and contractual, to their staff and any breach thereof will not be excused simply because the employer was unaware that the duty existed. The legal team at Law At Work are on-hand 24/7 to provide expert employment law advice. Had EIHEF consulted one of our advisors prior to taking a decision, this costly mistake could have been avoided.

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