Keeping Kids Company v. Smith & Ors

Under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992, a collective-consultation duty may arise where an employer has a sufficiently advanced, albeit conditional, proposal which may affect all employees. The employer need not know the identity of every employee at risk before consultation begins.

Consultation must start in time to be meaningful. This requires a forward-looking assessment and may require consultation before all section 188(4) information is available. A sudden event may amount to a special circumstance only for the period in which it makes further compliance impracticable. It must nevertheless be considered when fixing a protective award, which is assessed by the seriousness of the employer's default.

Keeping Kids Company, a charity in compulsory liquidation, dismissed its London and Bristol employees for redundancy on 5 August 2015. It had made no collective consultation under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992.

The Employment Tribunal majority held that a grant application and restructuring plan dated 12 June 2015 amounted to a proposal affecting all employees, that consultation should then have begun promptly, and that a 90-day protective award was appropriate. The Employment Judge dissented.

The employer appealed, contending that its consultation duty arose only after governmental funding was approved, that the later public disclosure of a police investigation was a special circumstance, and that the Tribunal had failed to consider mitigation when making the maximum award.

1. Appeal allowed in part. The Employment Tribunal was entitled to find that, by 12 June 2015, the employer had a sufficiently advanced proposal for collective redundancies which might affect all employees. Its alternatives were large-scale redundancies if funding was secured or closure and redundancy for all if it was not. A proposal may be provisional or conditional; it need not identify every individual at risk.

2. The Tribunal was also entitled to find that consultation had to begin promptly in order to be in good time under section 188(1A) of the Trade Union and Labour Relations (Consolidation) Act 1992. “Promptly” did not impose an automatic duty to begin consultation immediately upon formulating a proposal. It reflected the Tribunal’s permissible forward-looking assessment that, given the employer’s long-known financial position, further delay would prevent meaningful consultation. The absence of all information required by section 188(4) did not justify waiting; information may emerge during the consultation process.

3. The Tribunal permissibly rejected a distinction between the proposed September restructuring redundancies and the August dismissals. On the facts, the August dismissals remained within the original proposal, which did not guarantee that redundancies would occur only in September.

4. The outstanding grant application did not establish the section 188(7) defence. The employer had not shown that it had taken all reasonably practicable steps towards consultation. However, the unexpected events of 30 July 2015, which caused funding to be withdrawn and the charity to close almost immediately, were capable of being a sudden disaster and thus a special circumstance preventing further consultation from that date.

5. The 90-day protective award could not stand. The Tribunal had acknowledged that the events of 30 July might prevent further consultation, but failed to consider that plainly relevant matter when assessing what was just and equitable under section 189(4). The protective-award issue was remitted, subject to any agreement between the parties.

• Employment Appeal Tribunal: Allowed the employer’s appeal only as to the 90-day protective award and remitted that issue.
• Employment Tribunal, London South: By majority judgment sent to the parties on 21 November 2016, found the protective-award claims well founded and awarded 90 days’ remuneration.