The Stratford, East London-based business was part of the Hexcite Group when it went into administration in December 2021, with the impact of the coronavirus pandemic on the retail sector and cost inflation blamed at the time.
According to the administrator’s progress report, filed at Companies House, Kesslers International had 158 staff as of the appointment date of administrators from Kroll (17 December 2021), with 123 of these made redundant on appointment.
A further eight employees were made redundant on 23 December 2021, with an additional three made redundant on 31 December 2021, 11 January 2022, and 13 January 2022, respectively.
Employment specialist Nualaw was contacted by former workers of the business who had claimed they were not consulted over the job losses, and subsequently represented the majority of the staff who had been dismissed following the administration of the business.
The judgement was heard before Employment Judge Gardiner at East London Hearing Centre via Cloud Video Platform, last Wednesday (7 September). It stated: “The First Respondent has failed to comply with the requirements set out in Sections 188 and 188A Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA 1992”)”.
In this case, the The First Respondent is Kesslers International Ltd. The judgement was sent to the involved parties earlier this week.
Under the Trade Union and Labour Relations (Consolidation) Act 1992, when more than 20 staff are made redundant within a 90-day period, there needs to be at least a 30-day consultation period if the company is proposing under 100 redundancies, and – as in this case – at least a 45-day consultation period if it is proposing 100 or more.
Where the company in question is in administration, the first eight weeks of the compensation, currently capped at £571 per week, is payable by the National Insurance Fund (NIF) through the Insolvency Service’s redundancy payment service.
The remaining amount rests as an unsecured claim against the assets of the collapsed business. The payments due under the judgement are in addition to the employees' claims for statutory redundancy, arrears, notice, and holiday pay from the government.
Aside from the Kesslers staff represented by Nuala Toner, managing director of Nualaw, another claimant chose to represent himself but then withdrew the claim, while one more was represented by his union and his own lawyer.
The judge ruled that the 122 employees represented by Toner were entitled to a protective award “ordering the First Respondent to pay remuneration for a protected period of 90 days beginning on 17 December 2021, the date on which the first of the dismissals took effect”.
“It is just and equitable that the protected period should be 90 days having regard to the seriousness of the First Respondent’s default in complying with the requirements of Section 188 TULRCA 1992.”
A protective award is a payment awarded by an Employment Tribunal in cases where an employer fails to follow the correct procedure when making 20 or more redundancies and, where the tribunal finds in the favour of the employees, they will be able to access the funds of up to £4,568 via the Insolvency Service.
Toner told Printweek the money is payable by the government because there will not be funds to pay it in the administration.
Discussing the case, she said: “No consultation was undertaken in breach of the law, one of the aims of which is to mitigate the effects of the dismissals, for example by allowing employees the time to find other employment.
“To the contrary, staff were told that a sale process was likely to be completed by the end of the year. The tribunal acknowledged the seriousness of the failure by awarding the claimants the maximum compensation available for the breach of the legislation.
“It’s important that companies consult when facing multiple redundancies due to the socio-economic effects of mass job losses.
“Consultation, in addition to preparing employees emotionally, can reduce the effects of the dismissals, either by ceasing new recruitment or allowing current employees to find alternative work.”
Although she noted: “There are little consequences for the actual company or its directors as the government steps in to pay redundancy, notice and in this case, protective awards for failure to consult.”
Toner said the claimants could expect to receive their compensation in around two months’ time, depending on how busy the redundancy payment service is.
In January Kesslers was sold by Kroll to GB Sign Solutions, part of the acquisitive PFI Group, which in August also acquired wide-format printer Gardners from Hexcite Group in a pre-pack administration sale.
Hexcite was approached, but stated that it couldn't comment on the judgment as it was not party to the claim. Kroll was also approached, but had not commented on the judgement at the time of writing.
