What is a Protective Award?
You may have read in the news that a group of Thomas Cook’s redundant employees were raising an action to secure a Protective Award. So how does this differ from other employee entitlements, as detailed in Lynn Barr’s article ‘Employee Entitlements when your employer goes bust‘?
Margaret Linn answers the question “What is a Protective Award?”
A Protective Award may be made where the employer has failed to adhere to the redundancy consultation process.
If an employer is making 20 or more employees redundant, they must adhere to legal requirements including entering into a consultation process. There is no time limit for the length of the consultation process but there are minimum time limits of at least 30 days before dismissal for between 20 to 99 employees and at least 45 days if there are 100 redundancies or more. Given the nature of Thomas Cook’s collapse, the employees believe that there was inadequate consultation.
To get an Award there is a requirement for the employee to have an employment tribunal judgement in their favour. If the employer is solvent, then the employer must pay this. If it is insolvent the award will be paid by the Government, capped at 8 weeks wages at the statutory limit which is currently £525 per week.
Full details of Protective Awards can be found on the Insolvency Services website here.
Get in touch
If you have any questions about any of the issues raised in this article, please get in touch with a member of or Business Recovery and Insolvency team.