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Redundancy: Protective award made despite insolvency

This report relates to 1 case(s)

  • expand disabled

    Smith and another v Cherry Lewis Ltd (in receivership) [2005] IRLR 86 EAT (0 other reports)

Key points

In Smith and another v Cherry Lewis Ltd (in receivership), the EAT holds:

  • A protective award made under s.189 of TULR(C)A 1992 is intended to be a collective, punitive sanction on the employer, not compensation for individual loss to the employees. A court is not entitled to take into account the employer's ability to pay in making a protective award. The employer's insolvency is therefore irrelevant.
  • The guidelines set out by the Court of Appeal in Susie Radin v GMB [2004] IRLR 400 should be followed when a tribunal is considering making a protective award. The earlier decision of Spillers French v Usdaw [1979] IRLR 339, insofar as it introduced an element of compensation into the protective award, is no longer to be followed.