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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
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NIM07050 - Class 1 NICs: Payments made under employment legislation: Redundancy: Protective awards: General

Sections 188-192 Trade Union and Labour Relations (Consolidation) Act 1992

Under the above employment legislation, an employer who:

  • is proposing to make 20 or more employees redundant at the same workplace;
  • within 90 days or less of the first redundancy being made,

is required to consult appropriate employees’ representatives (ie, a trade unionor elected employee representatives if there is no union) about the proposals. If theemployer fails to do so, or does not comply with other specified statutory requirements,the representatives and/or the affected employees can complain to an employment tribunal(“ET”).

If the ET finds the complaint well-founded, it:

  • will make a declaration to that effect; and
  • may make a protective award.

If it makes a protective award, the employer is required to pay remuneration for aprotected period, to

  • any employee who has been made redundant, or whom the employer proposes to make redundant; and
  • in respect of whom the employer failed to comply with the consultation requirements in section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992.

The protected period:

  • begins with the date of the first redundancy or the date of the protective award, if earlier; and
  • ends on such date as the ET considers just in the circumstances,

but must not be longer than 90 days in length.

For details about:

  • the assessment by the employment tribunal of the amount payable by the employer to the employee, see NIM07051
  • the NICs treatment of amounts payable by way of remuneration under a protective award, see NIM07052.