No consultation before mass redundancy: protective award for 16 employees of Drinkmaster Ltd

What this case shows

This case is a stark reminder that the duty to consult collectively before large-scale redundancies is absolute, even when a company is heading into liquidation. Drinkmaster Ltd dismissed all 22 employees at its Liskeard establishment on 2 September 2020 without any consultation whatsoever. The company entered voluntary creditors' liquidation just 20 days later.

Sixteen former employees brought claims for a protective award under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992. The tribunal found that the employer had failed to consult with any appropriate representatives — there was no recognised trade union and no employee representatives had been elected. The dismissals were therefore unlawful.

What could have been done differently

Even in a dire financial situation, the employer could have taken steps to comply with the law. It could have arranged for the election of employee representatives and then consulted with them about ways to avoid or reduce the redundancies, or to mitigate the consequences. The tribunal noted that no consultation of any kind took place.

Why this matters

This decision confirms that the protective award is a powerful remedy for employees who are denied their right to collective consultation. The protected period of 90 days means each claimant is entitled to up to 90 days' pay. Although the company is in liquidation, the employees may be able to recover some or all of this award from the National Insurance Fund via the Secretary of State.

For anyone facing redundancy, this case highlights the importance of checking whether your employer has complied with its legal duty to consult. If you are one of 20 or more employees being dismissed at one establishment, you are entitled to a minimum of 30 days' consultation (or 90 days if 100 or more are affected). Failure to do so can result in a protective award.