The Employment Appeal Tribunal (‘EAT‘) has clarified that employers do not need to take account of past dismissals when considering whether the trigger for collective consultation over redundancies is met.
Legal Framework
Under s188 Trade Union and Labour Relations (Consolidation) Act 1992 (‘TULRCA‘), the obligation to carry out collective consultation in relation to proposed redundancies is triggered where an employer “is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less.” TULRCA also provides (in s.188(3)) that in determining how many employees an employer is proposing to dismiss as redundant “no account shall be taken of employees in respect of whose proposed dismissals consultation has already begun.”
These provisions implemented the requirements of the EU Collective Redundancies Directive. Shortly before the UK stopped being bound by EU law as a result of Brexit, the correct approach to the interpretation of this trigger was called into question by the European Court of Justice in the case of UQ v Marclean Technologies SLU (Case C-300/19) EU:C:2020:898. In that case, the Court held that in deciding whether a dismissal forms part of a collective redundancy under the EU Directive, it is necessary to consider all dismissals in a rolling 90 day period, both looking forward to future dismissals and looking backward to past dismissals. This decision now forms part of UK law as ‘assimilated law’ following Brexit.
There has been some uncertainty as to the effect of this case and whether it required employers to take account of all redundancies (past and proposed) in a rolling 90-day period when deciding whether the obligation to collectively consult was triggered. On one view, if an employer made 10 employees redundant and then subsequently proposed a further 10 redundancies in the same 90 day period, Marclean would have required these redundancies to be aggregated, triggering collective consultation obligations in respect of all 20 redundancies. This interpretation had serious practical implications for employers, both in keeping track of redundancies and because it is obviously not possible to comply with a consultation obligation in respect of past dismissals.
EAT Decision
The Employment Appeal Tribunal has now held that, upon proper analysis, the case of Marclean does not affect the interpretation of the trigger of when employers are ‘proposing to dismiss’ 20 or more employees. It held that this is intended to be a forward looking test and should not be interpreted as requiring an employer to also look back at past dismissals.
However, the EAT also sounded a cautionary note to employers. It observed that where there have in fact been 20 or more dismissals in a 90 day period, this will be relevant evidentially in considering whether there was a point in time at which 20 or more dismissals were proposed. It warned that Tribunals should be astute to see through artificial divisions of dismissals into batches, deliberate staggering of dismissals to take advantage of s.188(3) or other means of circumventing the collective consultation obligations.
It also held that the concept of ‘proposing’ dismissals is not tied to single moment in time: “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.”
Key Takeaways
This judgment is a helpful one for employers from a risk management perspective, in that it is now easier to calculate whether the 20-employee threshold for collective consultation obligations is met in any given circumstance and to keep track of when consultation will be triggered.
On the basis of the EAT’s decision in the situation referred to above, where an employer has dismissed 10 employees, but subsequently proposes to dismiss a further 10 employees in the same 90 day period, the duty to collectively consult will not be triggered. However, to defend a claim, the employer will need good evidence that the second batch of redundancies was not in fact contemplated when the first batch of redundancies was implemented. Similarly, if an employer begins collective consultation in relation to 20 proposed dismissals and subsequently proposes a further 10 in the same 90 day period, it will be able to rely on s.188(3) to avoid the need to consult in relation to the second batch of redundancies. What is not entirely clear from the decision is the position if an employer proposes 10 redundancies and then proposes a further 10 before the first batch of employees have been dismissed. It is still possible in those circumstances that the obligation to collectively consult will be triggered.
The decision in Mirco Focus also confirmed that collective consultation obligations only arise where 20 or more employees are proposed as redundant at one single employing entity within a 90 day period – it is not necessary to aggregate numbers between different group employers.
The clarity in this area is particularly welcome given that the Employment Rights Act 2025 (‘ERA‘) will increase the maximum penalty for non-compliance with collective redundancy consultation to 180 days in April 2026. Employers should also be aware that the ERA will introduce an additional threshold for collective redundancy consultation. The Government has not yet announced the new threshold but it is expected to take effect in 2027. Further details are available on the Reform Hub.
Employers should take the opportunity now to review their internal processes for how redundancy proposals are formed and documented as well as considering their record keeping systems for organisation-wide restructuring proposals.
