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Redundancy and collective consultation

The Employment Appeal Tribunal in the case of Keeping Kids Company v Smith and others has considered collective consultation obligations in redundancy situations.


On 12 June 2015, Keeping Kids Company (“the Company”) applied for a government grant following financial difficulties. In its application for the grant, the Company indicated that a restructure would take place and over half of the posts may be deleted (although specific posts were not identified).

The government offered a grant on 29 July 2015 in accordance with the application that had been submitted. However, police began investigations into safeguarding issues at the Company and the grant was subsequently revoked on 3 August 2015. In the absence of financial support, the Company closed on 5 August 2015 and all employees were dismissed.

Some employees brought claims for protective awards for failure to inform and consult under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”).

The Law

Under section 188 of TULCRA, an employer is obliged to collectively consult if it is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less.

Section 188(1A) TULRCA requires such consultation to begin “in good time”.


The Employment Tribunal held that the grant application submitted by the Company in June which indicated changes to the workforce amounted to a ‘proposal to dismiss’. It further held that the obligation to consult “in good time” meant that consultations had to begin “promptly” and even though at that point the Company didn’t know which employees would be made redundant, it should not have delayed consultation.

The Employment Appeal Tribunal dismissed the Company’s appeal against the decision. It concluded that on 12 June 2015 there was a proposal that might affect all of the Company’s employees and consultation should have begun promptly. The approval of the grant (and its revocation) did not remove the obligation to consult where insolvency or large-scale redundancies were envisaged.


This case is clear that collective consultation must begin promptly when an employer envisages dismissing 20 or more employees as redundant within 90 days, even when it has not identified which employees are potentially at risk or whether means of avoiding such redundancies have been or may be identified.

Employers must take collective consultation obligations under TULRCA seriously as failure to comply can lead to protective awards. Protective awards are designed to punish employers and a tribunal can award up to 90 days’ gross pay per affected employee.




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