Redundancy without consultation: protective award of £9,562 for former employee
A former employee of LA Metalworks Limited won a protective award of £9,562 after the company entered liquidation and failed to consult about redundancies. The tribunal found unfair dismissal but awarded no compensation because the employer was insolvent.
1 min read · Last updated 18 May 2026
Case details
Key facts
- The claimant was employed by LA Metalworks Limited.
- The company entered voluntary liquidation.
- The claimant was dismissed by reason of redundancy.
- The respondent failed to comply with its duty under section 188 of TULRCA 1992.
- The claimant succeeded in his claim for unfair dismissal but was not entitled to compensation.
- A protective award of 90 days' gross pay was made.
Timeline
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Protected period commencement
The protected period for the protective award began on 29 April 2022.
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Hearing and judgment
The employment tribunal heard the case and issued judgment, finding unfair dismissal and breach of s.188 TULRCA, awarding a protective award of £9,562.50.
The legal issue
The tribunal had to decide whether the former employee was unfairly dismissed and whether the employer breached its legal duty to consult collectively about proposed redundancies before dismissing employees.
The outcome
The tribunal found that LA Metalworks Limited unfairly dismissed the former employee and failed to comply with its duty under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 to consult about redundancies.
Key reasons:
- The company entered voluntary liquidation and dismissed the employee by reason of redundancy without any consultation.
- The employee succeeded in the unfair dismissal claim but was not entitled to compensation because the company was insolvent.
- A protective award of 90 days' gross pay was made for the failure to consult.
Compensation:
- Protective award: £9,562.50 (90 days' gross pay)
Lessons & takeaways
- Employers must consult collectively about redundancies when proposing to dismiss 20 or more employees within 90 days, even if the company is facing insolvency.
- A protective award can be made for up to 90 days' gross pay per employee for failure to consult, and this award is not affected by the employer's financial difficulties.
- Employees can still win an unfair dismissal claim even if the employer is insolvent, but compensation may be limited if the employer cannot pay.
- The Secretary of State may be liable for certain debts if the employer is insolvent, but this does not extend to protective awards in all cases.
When a company goes into liquidation, redundancy consultation still matters
This case shows that even when a business is failing and enters voluntary liquidation, the legal duty to consult employees about redundancy does not disappear. The former employee of LA Metalworks Limited was dismissed without any consultation as the company wound down. The tribunal found that this breached section 188 of TULRCA, which requires employers to consult collectively when proposing to make 20 or more employees redundant within 90 days.
What the employer could have done differently
Although the company was in financial trouble, it could have at least attempted some form of consultation, even if abbreviated. The tribunal noted the complete absence of any consultation process. A protective award of 90 days' gross pay was ordered, amounting to £9,562.50. This award is designed to punish the failure to consult and is not reduced because the employer is insolvent.
Why this result matters for similar claims
The case highlights that protective awards can be a valuable remedy for employees when an employer fails to consult about redundancies, even if the employer cannot pay compensation for unfair dismissal. However, employees should be aware that recovering the award may be difficult if the company is in liquidation. The claim against the Secretary of State was dismissed, meaning the protective award is not automatically covered by the National Insurance Fund. Employees in similar situations should seek legal advice about their options for enforcement.
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