Redundancy without consultation: dismissed but no compensation due to liquidation
A former employee was unfairly dismissed when Total Physiotherapy Ltd made him redundant without consultation, but a 100% Polkey reduction meant no compensation because the company had already gone into liquidation.
1 min read · Last updated 18 May 2026
Case details
Key facts
- The claimant was dismissed by reason of redundancy.
- The respondent failed to consult with the claimant before dismissal.
- The claimant received a redundancy payment of £448.76 from the Insolvency Service.
- The respondent went into liquidation, making it likely the claimant would have been dismissed even with consultation.
- The claimant was awarded six weeks' unpaid notice pay of £1,346.28.
Timeline
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Protective award period start
The protective award period begins, covering 90 days from this date.
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Hearing
The employment tribunal hearing took place via Cloud Video Platform.
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Judgment date
Employment Judge Dennehy issued the judgment.
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Written record sent
The written record of the decision was sent to the parties.
The legal issue
The tribunal had to decide whether the claimant was unfairly dismissed by reason of redundancy when the employer failed to consult, and whether a protective award should be made for failure to consult collectively.
The outcome
The tribunal found that the claimant was unfairly dismissed because Total Physiotherapy Ltd did not consult with him before making him redundant. However, because the company had already gone into voluntary liquidation, the tribunal applied a 100% Polkey reduction, meaning the claimant would have been dismissed even with proper consultation. As a result, the compensatory award was nil.
Compensation:
- Basic award: £448.76 (reduced to nil as already paid by Insolvency Service)
- Compensatory award: nil (100% Polkey deduction)
- Unpaid notice pay: £1,346.28 (breach of contract)
- Protective award: 90 days' pay (amount not specified in judgment)
Lessons & takeaways
- Employers must consult with employees before making them redundant, even if the business is struggling.
- A Polkey reduction can reduce compensation to nil if the tribunal finds the employee would have been dismissed anyway.
- Employees can claim unpaid notice pay as a breach of contract claim in the employment tribunal.
- If an employer fails to consult collectively, employees may be entitled to a protective award of up to 90 days' pay.
A redundancy without consultation
When Total Physiotherapy Ltd went into voluntary liquidation, it made its former employee redundant without any prior consultation. The employee brought a claim for unfair dismissal, arguing that the lack of consultation made the process unfair. The tribunal agreed, finding that the dismissal was procedurally unfair because the employer failed to consult with him before deciding to let him go.
Why compensation was nil
However, the tribunal also applied the Polkey principle, which allows a reduction in compensation if the employee would have been dismissed even with a fair process. Here, because the company was already in liquidation and had ceased trading, the tribunal concluded that the employee would have been dismissed in any event. This led to a 100% reduction, meaning no compensatory award was payable. The employee had already received a redundancy payment of £448.76 from the Insolvency Service, which offset the basic award.
What the employee did recover
The employee did succeed in a breach of contract claim for unpaid notice pay. He was awarded £1,346.28 gross for six weeks' notice, based on his weekly wage of £224.38. Additionally, the tribunal made a protective award for failure to consult collectively, covering a 90-day period from 2 May 2022. The amount of the protective award was not specified in the judgment.
Key takeaways
This case highlights that even when a business is in financial difficulty, employers must still follow proper redundancy procedures, including consultation. However, it also shows that compensation can be significantly reduced or eliminated if the outcome would have been the same. Employees facing redundancy should be aware of their rights to consultation and notice pay, and employers should ensure they follow the correct process to avoid findings of unfair dismissal.
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