EAT Rules On Trigger For Collective Redundancy Consultation

The EAT has ruled that first instance tribunals have been wrong to interpret a judgment of the European Court of Justice on EU law as impacting the trigger for the duty to inform and consult under UK law where an employer proposes small batches of redundancies. In the EAT's view, when applying the threshold of a proposal to make 20 or more redundancies in a 90 day period, the test is how many dismissals the employer is proposing at the material time for the future. The tribunal had therefore erred in interpreting the ECJ decision as meaning that an employer proposing redundancies "must look backwards and forwards for 90 days to determine whether there are sufficient redundancies to trigger the collective consultation obligations", so that an "an employer who has proposed fewer than 20 redundancies and then subsequently proposes further redundancies within 90 days (making the total 20 or more), should as far as possible consult collectively" with both groups. (Micro Focus Ltd v Mildenhall)

UK law implementing the EU Collective Redundancies Directive requires collective consultation where an employer 'proposes' to make redundant at least 20 employees within a period of 90 days. The application of this threshold is clear where only one batch of dismissals is proposed and made, less so where the employer proposes multiple batches with proposed termination dates within 90 days (perhaps because business conditions quickly deteriorate and the employer realises additional redundancies are required, or because a second unconnected batch is proposed, for example at a different worksite). UK law expressly provides that, in applying the threshold, no account is taken of an earlier batch of redundancies for which collective consultation has already begun. Where the employer has proposed and started collective consultation on a first batch of at least 20 proposed dismissals, a subsequent proposal to make a further 5 redundancies within 90 days will not be subject to the duty. The position where the first batch is only 15 redundancies is more uncertain.

In a pre-Brexit decision in 2020 (UQ v Marclean Technologies SLU), the European Court of Justice ruled that, in interpreting the definition of 'collective redundancies' in Article 1 of the Directive, employers have to look both backwards and forwards from an individual dismissal to determine whether the threshold number of redundancies is met over a rolling 90 day period, focussing on the actual dates of dismissal. Although the Court didn't consider the substantive obligations to inform and consult when an employer 'contemplates' collective redundancies under Article 2 of the Directive (or 'proposes' them, under UK law), a number of employment tribunal decisions interpreted the judgment as applicable to that question too, requiring employers to look back and forward within a rolling 90-day period covering the proposed dismissal in question. This could theoretically mean employers retrospectively become subject to the duty to consult on the initial batch of say 15 dismissals when they later propose 5 additional dismissals within 90 days, even if the first dismissals had already taken effect and collective consultation on that first batch had therefore become impossible.

The EAT has now rejected that interpretation, ruling that Marclean was not concerned with the trigger for consultation and, in any event, such an interpretation was not compatible with UK law. The correct focus of UK law is on whether the employer at some stage was 'proposing' 20 redundancies for the future. The EAT did stress that tribunals should scrutinise carefully the evidence where an employer in fact dismisses 20 or more employees within a period of 90 days but denies this was something it was at any stage 'proposing' in the past – tribunals should consider whether the employer was deliberately splitting the dismissals into batches to try and circumvent the obligations. The EAT also commented that tribunals should not give 'proposing' too narrow a meaning in the temporal sense – it is not limited to a single moment in time and could encompass plans formulated, for example, on three adjoining days.

For now (subject to the ruling of any higher court), the decision does at least seem to support the analysis that:

• an initial batch of 15 dismissals, that have already taken effect before the proposal of a second batch of 5 dismissals is formulated (with a proposed termination date within 90 days of the termination date of the initial batch), will not be taken into account when considering that second proposal, so the duty to consult will not arise in respect of either batch;
• the same may be the case where notice of termination has been given for the first batch before the second proposal is formulated, on the basis the first batch of dismissals would no longer be 'proposed';
• where the initial batch is of over 20 proposed redundancies and collective consultation has begun prior to the second proposal for 5 more being formulated, there will be no duty to consult for the second batch notwithstanding that notices of termination have not yet been given for the first batch (under the express provision in UK law).

However, the position remains uncertain where the initial batch of 15 dismissals is still at the stage of individual consultation (with notices of termination not yet given), at the time the employer realises it needs to make 5 more within the 90 day period. It is at the very least arguable that the initial batch is still 'proposed' in the future as at the point of the second batch being proposed, so that the two proposals together are for 20 dismissals within 90 days, meaning the employer may need to consult in respect of both batches. It is unclear whether the duty only applies if the two batches can be seen as part of the same, single 'proposal'. If so, would the fact that the second batch has arisen a considerable time after the first due to a change in circumstances mean it can be viewed as a separate proposal? Would batches concerning different parts of the business be viewed as separate proposals? Further case law will be needed to clarify these issues.

It is important that employers keep a record of what proposals have been made and the surrounding circumstances, and bear in mind the possibility that the duty to consult could arise mid-redundancy exercise if circumstances change. It is also worth noting that the Employment Rights Act 2025 will double the maximum protective award that can be made for failures to inform and consult (from 90 to 180 days' pay per affected employee); where there is uncertainty as to whether the duty could apply, it may be prudent to err on the side of caution. The Government's Roadmap indicates that it expects to bring this change into force on 6 April 2026, but as yet it has not confirmed how that deadline will apply (ie, whether it will apply only in respect of collective consultations commenced after that date, and/or in respect of dismissals where notice has been given after that date, for example). Further changes are expected in 2027, adding a second trigger for the duty to consult based on aggregated numbers across a multi-site employer's workplaces.

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