Navigating large-scale redundancies is a major headache for any business, and a key stress point is figuring out when you have to start a formal 'collective consultation', which applies when an employer is proposing to dismiss 20 or more employees in a 90 day period at one establishment.
Thankfully, a recent ruling at the Employment Appeal Tribunal (EAT) in Micro Focus Ltd v Mr Mildenhall brings some welcome clarity. It confirms that when deciding whether to consult, you only need to look forward at the redundancies you're currently proposing, not back at ones that have already happened.
Background
For a while, there has been confusion about how UK redundancy rules under the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) interact with the EU Collective Redundancies Directive. TULRCA says collective consultation is needed if an employer is 'proposing to dismiss' 20 or more people at one establishment within 90 days. The EU directive, however, used the word 'contemplating', and a past EU court case (Marclean) suggested employers at the time of a redundancy proposal might have to look backwards and forwards over a 90 day period at past dismissals as well as future dismissals to determine whether the trigger for collective consultation was met. This created uncertainty about when to collectively consult and when the 90-day period begins.
Facts
In the Micro Focus case, during a major restructure, Mr. Mildenhall was made redundant. The company had spreadsheets planning the changes that were shown to employees. These spreadsheets categorised individuals as “IN”, “redundancy” or “transfer”. Mr Mildenhall was marked “IN” but a few months later after what was described as an ‘intense period of planning’, he was made redundant.
ET decision
The initial Employment Tribunal (ET) found that over 45 redundancies were ‘planned’ in the 90-day period when looking both forwards and backwards. Because Micro Focus had not run a collective consultation, the ET found that the company had failed to follow the correct process for collective consultation redundancies and ruled that Mr Mildenhall’s individual dismissal was unfair. Micro Focus appealed, arguing (amongst other things) that the tribunal got the collective consultation trigger wrong.
EAT decision
The Employment Appeal Tribunal agreed with Micro Focus on the key legal point about the timing of the trigger. It clarified that the UK test is 'forward-looking.' The duty to consult is triggered when an employer *proposes* to make 20 or more people redundant, not by counting dismissals that have already occurred. The EAT confirmed that the Marclean case's 'look back and forward' approach does not apply to triggering consultation in the UK. Essentially, it is about your current plans for the future.
Fladgate comment
This ruling is good news for employers, but there are still pitfalls to be aware of.
While employers do not have to count past dismissals, tribunals will still look closely at an employer’s actions. If it looks like businesses are deliberately staggering redundancies in small batches to avoid consulting, they can infer that a larger plan was in place all along. What a business *actually* does can be used as strong evidence of what they were *proposing* to do earlier.
The key is to be transparent and keep detailed, accurate records of any redundancy plans.
Finally, even with this clarification, the standard rules for fair individual consultation and selection still apply for employees who have unfair dismissal protection. This protection will apply to a lot more employees from 1 January 2027 when the qualifying period for unfair dismissal reduces to six months under the Employment Rights Act 2025.
