- within Employment and HR topic(s)
- with Senior Company Executives, HR and Finance and Tax Executives
- with readers working within the Business & Consumer Services, Law Firm and Construction & Engineering industries
EAT provides clarity about when collective redundancies are 'proposed.'
The case of Micro Focus Ltd v Mildenhall highlights how Tribunals should determine whether redundancies are 'proposed' and therefore subject to the duty to collectively consult.
On the cusp of changes to the collective consultation regime resulting from the Employment Rights Act 2025, this case serves as a timely reminder for employers embarking on organisational change and restructure programmes.
Collective consultation
Under s.188 of the Trade Union and Labour Relations (Consolidation) Act 1992 ("TULRCA"), the duty to collectively consult is currently triggered when an employer is 'proposing' to dismiss 20 or more employees at one establishment in a 90-day period. This covers both large-scale redundancies and dismissal and re-engagement programmes.
In our December article, we detailed the key changes to collective consultation arising from the Employment Rights Act 2025: Employment Rights Act 2025 – key points employers need to know now
Whilst the existing establishment-based trigger to collectively consult will remain for employers, there will be an additional, aggregate trigger based on the number of dismissals proposed across the whole organisation. We await further details of this new trigger, which will be the subject of consultation. This consultation is expected to take place in early 2026 but has not yet commenced.
Currently, the maximum protective award for failure to collectively consult is 90 days' gross pay per employee affected by the failure. However, from 6 April 2026, this award will double to 180 days' gross pay per employee. It is envisaged that the doubled protective award will apply to dismissals on or after this date.
In dismissal and re-engagement scenarios, employers also face the risk of an increase of up to 25% in any protective award made if they fail to comply with statutory Code of Practice on Dismissal and Re-engagement.
The facts of the case
Mr Mildenhall was employed in the sales division of Micro Focus Limited ("MFL"), a large international IT company, between December 2015 and July 2022, when he was made redundant.
Unhappy with his redundancy, Mr Mildenhall brought claims in the Employment Tribunal for unfair dismissal and a protective award under s.188 of TULRCA. He alleged that MFL had failed to collectively consult whilst proposing to dismiss 20 or more employees in a 90-day period.
The Employment Tribunal upheld his unfair dismissal and protective award claims.
The Tribunal concluded, by reference to the case of UQ v Marclean Technologies SLU 2022 IRLR 548 ("Marclean"), thatan employer who proposes fewer than 20 dismissals within 90 days is subject to the obligation to collectively consult if it subsequently proposes additional dismissals within a period of 90 days which takes the total dismissals to 20 or more.
Whilst the evidence in Mr Mildenhall's case was lacking in clarity about what proposals were made and when, the Tribunal concluded that, on the balance of probabilities, MFL had proposed to dismiss more than 20 employees within a 90-day period.
The Tribunal also accepted Mr Mildenhall's assertion that MFL was his 'de facto' employer, and that due to MFL's consolidated payroll, HR system, organisational chart and style of email address, its UK operations were a single establishment for consultation purposes.
MFL accepted that it had not collectively consulted staff prior to the redundancy exercise affecting Mr Mildenhall and therefore the Tribunal made a protective award of 90 days' pay in his favour.
MFL appealed to the EAT. One of its appeal grounds was that the Tribunal had misdirected itself by treating the Marclean case as meaning Tribunals could look backwards as well as forwards when determining whether an employer had 'proposed' enough redundancies to trigger the duty to collectively consult.
EAT decision
The EAT agreed that the Tribunal had misdirected itself as to the meaning of the Marclean case and allowed MLF's appeal on this ground.
The Marclean case did not address the question of whether collective redundancies were 'contemplated' or 'proposed' under s.188 of TULRCA. Instead, the case considered whether the necessary threshold number of actual redundancies had taken place during the relevant period under the EU Collective Redundancies Directive to determine if an individual's dismissal was part of that collective redundancy exercise.
The duty to collectively consult is not triggered simply because an employer makes more than the threshold number of redundancies within a relevant period.
TULRCA does not define collective redundancies by the number of dismissals which take place within any period. Instead, it looks to whether the employer is 'proposing' to dismiss as redundant 20 or more employees within 90 days. This is a question based on the employer's plans. The duty to consult applies even if fewer than 20 employees are subsequently dismissed or if the proposed dismissals do not occur within the envisaged period of 90 days or less but within a longer period.
Employment Tribunals should however scrutinise carefully evidence from an employer who has dismissed as redundant 20 or more employees within a period of 90 days but denies this was something it was at any stage 'proposing'in the past. The EAT's view was that "Dismissals do not happen by accident" and Tribunals should be astute to see through artificial divisions of dismissals into batches and/or the deliberate staggering of dismissals to avoid triggering the duty to collectively consult.
The EAT also found that the Tribunal had erred in concluding that MLF was Mr Mildenhall's employer and allowed its appeal on this ground. The Tribunal should have asked whether MFL was proposing to dismiss as redundant 20 or more employees employed under contracts of employment with MLF.
Implications for employers
The case explains how Tribunals should approach the question of whether the collective consultation duty has been triggered. The focus should not be on whether 20 or more employees have been made redundant within a 90-day period, but rather on how many redundancies were 'proposed' by the employer within a 90-day period at the time the relevant redundancies were contemplated. When counting the number of proposed dismissals, employers do not need to look backwards as well as forwards to include dismissals which have already been proposed. However, employers should be aware of the risk that they are found in fact to have proposed a subsequent batch of dismissals at an earlier stage, triggering the duty to collectively consult.
There are many reasons why employers need to consider, propose and make redundancies quickly or in a series of change projects. Employers should therefore ensure that they clearly document their redundancy proposals each time redundancies are contemplated so that if there is a need to propose further redundancies within a timeframe which could subsequently trigger the s.188 duty to collectively consult, they can evidence why the duty was not previously triggered.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
