Summary

In Micro Focus Ltd v Mildenhall, the Employment Appeal Tribunal (EAT) has clarified that when determining whether collective redundancy consultation is required, employers only need to look at redundancies they are planning for the future. They do not need to take into account redundancies that were proposed in the past.

Background

Under s.188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), an employer must collectively consult when it is proposing to dismiss 20 or more employees as ‘redundant’ at one establishment within a 90‑day period. (‘Redundant’ here includes proposing to dismiss employees for reasons not related to the individuals concerned, for example changing their terms).

In 2020, the ECJ ruled, in the case of UQ v Marclean Technologies, that when determining whether collective consultation is required, the reference period is a period of 90 consecutive days during which the relevant dismissal took place and in which the employer dismissed the greatest number of employees. Whilst the concept of ‘proposing to dismiss’ in TULRCA was previously understood to refer to the future dismissals of employees, employment tribunals have in recent years interpreted Marclean to mean that employers need to look forwards and backwards from an individual dismissal to calculate whether or not the threshold of 20 dismissals has been reached in a rolling 90-day period. This has caused significant difficulties for employers who have therefore counted previous redundancies with subsequent ones over a 90-day period, in order to determine if collective consultation is required.

Facts and Employment Tribunal decision

Mr Mildenhall ran the Business Intelligence and Reporting team at Micro Focus, an international IT company. Mr Mildenhall was dismissed for redundancy on 29 July 2022. He brought a claim for a protective award under s.188 TULRCA, alleging that Micro Focus failed to consult collectively before proposing large scale redundancies. Whilst Micro Focus’s proposals for redundancies arose at different times, Mr Mildenhall sought to rely on spreadsheet evidence that 45 employees were to be made redundant in one business area within a 90-day period.

The tribunal found for Mr Mildenhall. The employer had not kept track of the number of employees to be made redundant at different times. The tribunal found there was an obligation to look backwards and forwards to determine whether there were sufficient redundancies within a rolling 90-day period (including Mr Mildenhall’s)  to trigger the collective consultation obligations.

Micro Focus appealed to the EAT.

EAT decision

The EAT disagreed with the tribunal’s analysis that Marclean meant an employer should look backwards and forwards 90 days from the relevant dismissal in order to decide whether the collective consultation threshold had been reached.  It found that Marclean does not affect the interpretation of whether and at what point an employer is proposing to dismiss 20 or more employees, and that the ECJ had actually been considering the question of which dismissals are included in ‘collective redundancies’. The duty under s.188 arises when an employer proposes to dismiss 20 or more employees, and this means what the employer is proposing for the future, not what it may have proposed in the past. As a result, the tribunal was wrong to treat Marclean as requiring or permitting a backward looking assessment.

However, the EAT noted that where an employer does in fact dismiss 20 or more employees within 90 days but denies this was ‘proposed’ at any point, tribunals should scrutinise the evidence carefully. The EAT warned tribunals to look at artificial divisions of dismissals into batches, or deliberate delaying or staggering of dismissals, to circumvent the collective consultation process. It also cautioned that a proposal for dismissal is not tied to a single moment in time. The EAT gave the example that if an employer proposes six dismissals on Monday, seven on Tuesday and eight on Wednesday, it is effectively proposing 21 redundancies that week, and said that it will always be a question of fact for the tribunal to decide whether the employers was, at some stage, ‘proposing’ the threshold number of dismissals.

What does this mean for employers?

This judgment represents an important clarification for employers and should to some extent reduce the complications around collective redundancy consultation.

Collective consultation is now less likely to be necessary when an employer is making batches of redundancies of fewer than 20 people. Most significantly, the EAT’s ruling confirms that employers do not need to look back at previous redundancies and redundancy proposals when assessing whether the s.188 collective consultation threshold is crossed in relation to their current proposal.

The EAT’s ruling confirms that the focus is on what the employer is currently proposing, not on past proposals or decisions. This means that if, for example, an employer is proposing to make 15 dismissals in May, then a month later unexpectedly has to make another 10 dismissals, collective consultation would not be required because at the time the 15 dismissals were proposed, the employer was not expecting there to be any other dismissals within 90 days from May.  However, in these types of situations, when a tribunal can see that, with hindsight, 20 or more dismissals did actually take place within a 90-day period, it is likely to scrutinise the evidence carefully. Unless an employer can demonstrate otherwise, a tribunal may infer that (in this example) 25 dismissals were actually proposed in May and that the employer had artificially separated the proposals in order to avoid collective consultation requirements. Employers should therefore keep careful records of their workforce plans so that they can defend any such inference by the tribunal. It also means that employers may still want to exercise caution regarding consultation requirements when making batches of redundancies.

From April 2026, under the Employment Rights Act 2025, the maximum award against employers for failing to collectively consult on redundancies will double from the current 90 days’ pay, to 180 days’ pay, per affected employee. Employers need to bear in mind this increased risk when considering their approach to collective consultation. Additionally, from 2027, the Employment Rights Act 2025 is set to expand the threshold for collective redundancies, although we are currently awaiting more detail on this.

How we can help

If you are a Make UK subscriber, you can speak to your regular adviser with any queries you may have and to request further consultancy support. Make UK subscribers can also access guidance on a wide range of employment law topics including template policies and drafting guidance in the HR & Legal Resources section of our website. The relevant parts of our Redundancies | Make UK and Changing employment terms and conditions | Make UK are in the process of being updated as a result of this new case law.

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If you would like further information on the impact of the Employment Rights Act 2025 on collective consultation requirements, see our ERA Knowledge Base, which includes our Spotlight: How the Employment Rights Act is changing collective redundancy consultation.