In this case, the EAT confirmed that employers in cases involving staggered dismissals are not required to look backwards as well as forwards when assessing whether statutory collective redundancy consultation is required under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).
Background
Section 188 of TULRCA requires employers to carry out collective consultation where they are proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days.
This provision is derived from EU law – namely, the Collective Redundancies Directive (the Directive). In UQ v Marclean Technologies SLU (Marclean), a case concerning Spain's implementation of the Directive, the European Court of Justice (ECJ) held that when determining whether a particular dismissal was part of a collective redundancy, the relevant reference period was any period of 90 consecutive days during which the individual dismissal took place.
Marclean was decided before the end of the Brexit transition period, so it is part of the EU case law that has been assimilated into UK law. Employment tribunals have interpreted Marclean to require employers who are proposing redundancies to look both backwards and forwards from the date of an individual proposed dismissal to determine whether collective redundancy consultation is required under section 188 of TULRCA.
This is the first time this issue has come before the EAT.
Facts
Micro Focus Ltd (MF) dismissed Mr Mildenhall for redundancy in 2022. He claimed unfair dismissal and a protective award for alleged failure to collectively consult as required by section 188 of TULRCA. An employment tribunal upheld both claims. In respect of collective consultation, the tribunal determined that, following Marclean, there was an obligation to look both backwards and forwards, so "an employer who has proposed fewer than 20 redundancies and then subsequently proposes further redundancies" will be caught by section 188. MF appealed.
The EAT upheld the appeal, finding that the tribunal had misinterpreted Marclean. The EAT considered that Marclean was not about whether an employer was “contemplating” dismissals for the purposes of Article 2 of the Directive (which section 188 of TULRCA implements), but was actually about the meaning of “collective redundancies” under Article 1 of the Directive. As a result, Marclean did not affect the proper interpretation of what is meant by “proposing” (the UK's wording for "contemplating") collective redundancies in section 188 of TULRCA.
The correct approach under TULRCA is prospective, requiring an assessment of the number of dismissals that an employer is “contemplating” or "proposing" in the future. Where an employer proposes a second tranche of dismissals as a result of events that were entirely unforeseeable when a first tranche was proposed, it cannot be said that – viewing matters in light of later events – the employer was "proposing" all the dismissals when it proposed the first tranche.
However, what in fact happens subsequently will often be highly relevant evidentially to what the employer was “proposing” in the past. The EAT commented that tribunals should be astute to see through artificial divisions of dismissals into batches, deliberate delaying, or staggering of dismissals to take advantage of section 188(3) of TULRCA. That is the provision which states that when determining numbers, no account shall be taken of employees in respect of whose proposed dismissals consultation has already begun.
The EAT also noted that section 188 is intended to protect workers, so the concept of "proposing" should not be given a narrow temporal meaning. It is not necessarily tied to a single moment in time. Ultimately, whether an employer was, at some stage, "proposing" the threshold number of dismissals is a question of fact for the tribunal.
In addition, the EAT held that the tribunal had erred in treating MF as the de facto employer of all employees within its corporate group in the UK. The only employees who should be counted when assessing whether collective consultation is required under section 188 are those with whom the employer has a contract of employment. Employees of other companies within the group should not be included.
The EAT remitted the case to the same tribunal to reconsider whether section 188 applied using the correct approach.
What does this mean for employers?
This case helpfully clarifies the position as regards entirely new and previously unforeseen proposals for redundancies, and makes clear that the test for identifying whether collective consultation is required is forward looking. As a result, employers can be comfortable in not looking backwards to past dismissals at an establishment when determining whether an entirely new (and previously unforeseen) proposal may meet the threshold of 20.
However, employers should take heed of the EAT's warning around anti-avoidance and not giving a narrow meaning to timeframes. Employers will be in breach of section 188, facing potentially substantial protective awards (which are increasing to 180 day's pay under the ERA 2025) to affected employees (and also risk criminal sanctions in respect of a failure to notify the Department for Business and Trade via the HR1 Form) if a tribunal finds that they sought artificially to delay or stagger batches of redundancies in order to avoid their collective consultation obligations.
Employers should therefore ensure that proposals and rationales are well documented, with clear explanations contemporaneously recorded around any new proposals which are made during any 90 day window.
