Keeping Kids Company v Smith EAT: Keeping Kids Company (“KKC”) is a children’s charity, which got into financial difficulties. On 12th June 2015 it submitted an application for a government grant on the basis of a business plan which included a restructure and a number of redundancies, though no specific posts had been identified as redundant at that stage. On 29th July 2015 the grant was awarded. On 30th July 2015 it became known that the Metropolitan Police were investigating safeguarding issues at KKC and on 3rd August 2015 the Cabinet Office terminated the grant and asked for repayment. On 5th August 2015 KKC closed and all staff were dismissed as redundant. They brought a claim on the basis that there was a failure to comply with collective consultation periods.

The law requires a minimum period of consultation when it is proposed that 20 or more employees will be dismissed as redundant. There is an exception in law, which allows an employer to consult for less than the minimum period if there are special circumstances which mean it is not reasonably practicable to do so. This is what KKC relied on.

The EAT found that by 12th June 2015 there was a proposal that might affect all employees of KKC as either the grant would not be awarded and KKC would face immediate insolvency or the grant would be awarded and there would be large scale redundancies. It was held that the withdrawal of the grant on 3rd August 2015 did not amount to special circumstances excusing KKC from the obligation to consult with employees and that, in the circumstances, KKC should have begun consultation promptly as soon as it had an intention to make at least 20 employees redundant.

This is important because it clarifies that the obligation to consultation for redundancy is triggered as soon as it is proposed that at least 20 employees will be redundant, even if the employees or roles at risk have not yet been identified.

For more information please contact Hannah at HannahStrawbridge@eatonsmith.co.uk