| 
Wilko’s £2m Lesson: Don’t overlook collective consultation
A recent tribunal ruling against high-street retailer Wilko serves as a costly reminder that even technical breaches of collective consultation law can carry a high price. Following its 2023 collapse, Wilko was found to have failed in its legal duty to properly consult with staff ahead of making large-scale redundancies. The result? Protective awards worth around £2 million across its former workforce.
The GMB union brought the claim on behalf of around 10,000 workers. While some consultation had taken place, the tribunal ruled it was not enough to meet the requirements under the Trade Union and Labour Relations (Consolidation) Act 1992. As a result, affected employees were awarded either 4- or 13-days’ gross pay – against a legal maximum of 90.
The tribunal acknowledged Wilko’s financial difficulties but made clear this was no excuse. The law does allow an exception where “special circumstances” make consultation impossible, but this is a high bar – and one Wilko couldn’t meet. Even in administration or during a business collapse, employers are expected to inform and consult with staff as fully as possible.
This case highlights how even seemingly small failings can have a large cumulative cost. A four-day award per employee might sound minor, but when applied to thousands of staff, the financial risk quickly becomes significant.
What HR should do now:
- Make sure your collective consultation processes are ready to go if large-scale redundancies are ever on the table.
- Engage with employee or union representatives early and meaningfully.
- Don’t assume that financial hardship exempts you from consultation duties.
- Watch out for changes in the law – the upcoming Employment Rights Bill proposes tougher penalties (upping the maximum award from 90 to 180 days’ pay) and wider consultation triggers.
Wilko’s experience is a cautionary tale for any employer with a large workforce: technical missteps can become million-pound problems.