This case highlights when employers must begin collective consultation and the difficulties employers encounter when relying on a 'special circumstances' defence when they are in breach.
Under s188 Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), an employer is obliged to collectively consult with appropriate representatives of affected employees if it is "proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less."
The law requires consultation to "begin in good time" and in any event, where there is a proposal to dismiss 100 or more employees at least 45 days before the first of the dismissals takes effect. Where proposals relate to fewer than 100 employees, consultation must begin at least 30 days before the first dismissal takes effect.
At first instance, the ET found that KKC was in breach of its collective consultation obligations. The case went to the EAT on appeal by KKC, but its appeal was dismissed.
The EAT upheld the ET's finding that by 12 June 2015, there was a 'proposal to dismiss' which might affect any or all of KKC's employees. This was on the basis that the proposal allowed for only two outcomes: immediate insolvency which put everyone at risk, or large-scale redundancies where over half of the staff were dismissed.
The EAT found that it was no answer for KKC to say that it did not have sufficient information to comply with its s188 obligations until it had received the government's response to its grant application. There was no obligation to provide the actual names of those employees that were proposed to be made redundant.
In terms of when the obligation to consult arose, the EAT noted that the law requires employers to consult 'in good time' so as to allow for the consultation to be 'meaningful'. It held that the ET had been entitled to find in the particular circumstances that in order to be meaningful (given the delay that had occurred before KKC had formulated its 12 June 2015 proposal), consultation had to start 'promptly.' The ET's concern was not that KKC was required to start the consultation process immediately but that the delay that had occurred before 12 June meant that it was already too late.
The EAT clarified that the requirement to consult 'in good time' did not oblige an employer to commence the consultation process immediately once it had formulated the relevant proposal. Instead, an employer is required to "look ahead and realistically assess the time-scale required to ensure meaningful consultations can be held (having particular regard to the minimum time periods set out under s188(1A))."
The EAT rejected KKC's argument that the outstanding application to the government or the investigation by the Met were 'special circumstances' excusing KKC from their obligation to consult. The Met investigation on 30 July 2015 was irrelevant given that the obligation to consult had already arisen by 12 June 2015.