Why the case matters
Collective redundancy exercises are one of the most challenging projects for an employer to undertake. The consequences of getting the duty to inform and consult wrong can be enormous, with the maximum compensation for failure set at 90 days' gross pay per affected employee (to increase to 180 days in April 2026. In the case reported below, the EAT provided some much-needed clarity on how to count proposed dismissals at the relevant time.
Section 188 of Trade Union & Labour Relations (Consolidation) Act 1992 (TULRCA) sets out the requirements for collective consultation. The duty arises when an employer is proposing to dismiss as redundant 20 or more employees at one establishment in a period of 90 days or less.
TULRCA implements the EU Collective Redundancies Directive which defines collective redundancies in Article 1, and provides that obligations to inform and consult are triggered when 20 or more redundancies are contemplated in Article 2. The UK implementation differs in some significant respects to the Directive, and so it is not always easy to extrapolate form ECJ decisions what this means for UK law.
A 2020 decision of the ECJ, Marclean, held that dismissals should be counted retrospectively and prospectively in a 90-day rolling period, when calculating what counts as a dismissal for collective redundancy purposes. Marclean was widely interpreted by Employment Tribunals as requiring employers to look both back and forward from an individual dismissal date to determine whether 20 or more dismissals had been proposed, even though the natural meaning of the word "propose" is forward-looking. This created obvious practical difficulties when redundancies are made in batches which individually would not add up to 20 but would when taken together. It should also be noted that section 188(3) TULCRA provides that where consultation has already begun in respect of one batch of dismissals, those numbers should be discounted for the purposes of a subsequent batch proposed.
Facts
Micro Focus Ltd is a large international IT company. Mr Mildenhall was employed to run the business intelligence and reporting unit within the sales division. In September 2021, a reorganisation was announced and, in November of that year, Mr Mildenhall was in a meeting where he was shown a spreadsheet marking him as "in". He took that to mean he was safe from redundancy.
In mid-January 2022 there was a period of intense planning which led to a second spreadsheet being created in March, with a proposal to make 45 employees redundant- including Mr Mildenhall. He was eventually dismissed in July 2022 and brought claims of unfair dismissal and failure to inform and consult collectively.
An employment tribunal held that there had been a failure to inform and consult collectively. Amongst other things, the tribunal found that there had been a failure to look backwards and forwards when counting dismissals in the 90-day period: "there had been …as per Marclean, there is an obligation to look both backwards and forwards so that an employer who has proposed fewer than 20 redundancies and then subsequently proposes further redundancies will be caught by the s.188 obligations".
Micro Focus appealed to the EAT on several grounds, including erroneous reliance on Marclean.
Decision
The EAT found that the Tribunal had erred in its interpretation of Marclean That decision only concerned the definition of collective redundancies (what counts as a collective redundancy dismissal) under Article 1 of the Directive. The case was about determining whether an individual dismissal forms part of a collective exercise, not about when the duty to consult is triggered, which is dealt with by Article 2.
Looking at the UK statute, the wording of s.188 TULRCA is straightforward and clear. A proposal is always something that occurs in the future and is based on what the employer is planning. There is no requirement to count retrospective proposals, especially as that is specifically discounted by s.188(3) TULRCA.
Comment
The widely held interpretation of Marclean in first instance decisions did not sit easily with most, so this common sense decision from the EAT is welcome. By confirming that a proposal is forward-looking, the EAT has moved away from what looked to be an unnavigable interpretation of Marclean
However, that doesn’t mean a tribunal can always ignore the past. Occasionally staggered dismissals are engineered by unscrupulous employers as a way of avoiding s.188. Where 20 or more dismissals happen in 90 days in two or more batches, an employer can expect to be scrutinised as to when those proposals actually arose. There might be a genuine and reasonable explanation for the later proposal - loss of a client, a big order falling through, below par financial results coming to light - but if that new trigger is missing, an employer can expect to come under pressure to explain themselves
The case is also a timely reminder to start consultation at an early stage before plans crystallise. Micro Focus failed completely to collectively consult but it is clear from the tribunal's judgement that its proposals had been finalised in January 2022, at least two months before individual consultation with Mr Mildenhall started which, frankly, is too late. Far too often employers present redundancies as a fait accompli. Instead, employers should make sure no final decisions are made until plans have been put to the workforce and all internal documentation should reflect this.
Finally, it is about to be more important than ever to get this right. The maximum penalty for a protective award will increase from 90 days' gross pay to 180 days' gross from April 2026.
Authored by James Tamm, Senior Counsel
