Background

The EU Collective Redundancies Directive introduced certain protections for workers in collective redundancy situations by imposing obligations on employers to consult on a collective basis in advance and to notify the competent public authority if proposing to make redundancies over a certain numerical threshold. In the UK, the obligations were brought into effect by sections 188 and 193 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).

TULRCA requires an employer to engage in collective consultation if it is ‘proposing to dismiss’ as redundant 20 or more employees at one establishment within a period of 90 days. The wording of TULRCA is slightly different from that of the Directive, which uses the phrase ‘contemplating collective redundancies' rather than ‘proposing’ but nothing in this decision hinges on that distinction.

In the UK, ‘proposing to dismiss’ was generally understood to mean proposing to dismiss in the future, and therefore did not take into account any redundancy dismissals that had already happened

Towards the end of the Brexit transition period, a European Court of Justice (ECJ) decision, appeared to cast doubt on whether the UK approach of looking forward only was compatible with the Directive. The ECJ in Marclean said that when deciding if a dismissal is part of a collective redundancy programme, you must consider all such dismissals within the period of 90 consecutive days within which that individual dismissal occurred. This means, employers should look at a ‘rolling’ 90 day period both forwards and backwards and take into account any dismissals already made or underway as well as future dismissals. This appeared to mean that, when deciding if you hit the threshold – in that you ‘propose to dismiss’ at least 20 employees - you need to add in past dismissals and redundancy consultations underway within the 90-day period going back, as part of your calculation. Although, as we discussed in our article about the case, which was based on quite different Spanish implementing law, it was always unclear how well that decision could work with the UK statutory wording which focussed on proposals rather than previous decisions.

EAT decision

In a narrow reading of Marclean, the EAT has now ruled that the case does not affect the proper interpretation of whether and at what point an employer is ‘proposing’ to dismiss 20 or more – triggering the collective consultation duty – only the actual definition of what are included as ‘collective redundancies’.

According to the EAT, the focus of these provisions is on what the employer is proposing for the future. So, if an employer proposes 10 redundancies only and then two months later proposes another tranche of just 10 redundancies, it was not necessarily at any point proposing to make 20 redundancies within 90 days.

Implications for employers

Employers can breathe a (half) sigh of relief, as the EAT decision makes it less likely that the collective redundancy obligations will bite if, having previously made fewer than 20 redundancies, they find they have to make more.

They cannot relax fully, however, as the decision does not shed full light on this complicated area of law and may not be the final word.  It’s not certain that the EAT’s restrictive interpretation of Marclean would survive analysis by a higher court, whether through an appeal of this decision or in another case. Although, given its status as ‘assimilated EU law’, the Court of Appeal or Supreme Court could also depart from the Marclean decision if they felt ‘it is right to do so’. And they might be persuaded to do so given that the Marclean decision caused a significant, unforeseen widening to the scope of collective redundancy law.

As you might expect, tribunals will be alert to the possibility of subterfuge by employers who are trying to evade their obligations under TULRCA and may not necessarily believe an employer’s assertion that it did not propose a second batch of dismissals at the time when it proposed a first batch.

Additionally, the EAT admits that the concept of ‘proposing’ is not so inelastic that it is tied to a single moment in time, quite rightly commenting that: ‘an employer who proposes, say, six dismissals on Monday, seven on Tuesday and eight on Wednesday may readily be said to be ‘proposing’ 21 redundancies that week … in every case it will be a question of fact for the ET to decide whether the employers was, at some stage, ‘proposing’ the threshold number of dismissals’. Exactly where a tribunal draws this line will vary from case to case.

More significantly, this decision does not explore the distinction between past redundancies where dismissal has already occurred and those still in a continuing redundancy process. An employer who dismisses 10 employees for redundancy and then two months later proposes to make 10 more redundancies might not at any point in that period ‘propose’ 20 redundancies, because the first have already happened (and are therefore no longer proposals) by the time of the second batch. But – by contrast - an employer who has only just started individual consultation with the first group of affected employees when it realises it has to make more redundancies than it originally proposed, might well at that point be said to be ‘proposing’ 20 redundancies in total.

A third common practical scenario arises where there are completed redundancy processes but where employees might still be working notice periods. It is less clear that at this stage there is still a “proposal” to dismiss – it looks more like a decision that has already happened.

If the first batch is large enough that the employer has already begun collective consultation in relation to those redundancies, then those numbers are excluded under a specific existing exemption in TULCRA. For example, suppose you propose 20 redundancies, begin statutory collective consultation, then realise that you must make an additional 10 redundancies in another part of the business. Under the exemption, you can ignore the first batch of redundancies when deciding whether the second batch triggers collective consultation obligations. The Marclean decision had cast some doubt on whether this UK exemption was compatible with the Directive, but the post-Brexit legal regime and ruling in this case mean the exemption should be safe. The key area of ongoing uncertainty relates to the counting of earlier batches of redundancies where there has been no collective consultation.

Employers should take a pragmatic approach when planning redundancies and be open to the possibility of starting collective consultation if circumstances change, further redundancies are planned and consultation is not obviously pointless. They should also try to keep a clear record of their proposals and when they were reached, including any changes, to demonstrate their intentions to any tribunal. Particularly when such batches can be separated and distinguished as different decisions altogether. This is something the employer in this case signally failed to do, hampering its ability to defend this claim.

Employers should also bear in mind that the risks associated with lack of collective consultation are set to increase from April this year, when the protective award for not complying will double (see our article here for more details). Additionally, from 2027, more redundancy exercises are likely to trigger collective consultation, as a result of further changes to the threshold test for collective redundancies. The details of the new threshold test are still be to be determined, but our article explaining the anticipated changes is here.

Micro-Focus Ltd v Mr James Mildenhall [2025] EAT 188 – judgment available here.