Past Dismissals Aren’t Factored When Assessing Threshold for Proposed Redundancies, UK EAT Holds

Quick Hits

• Collective redundancy consultation is required if an employer proposes to dismiss twenty or more employees over a ninety-day period.
• In Micro Focus v. Mildenhall the EAT ruled that previous redundancies do not need to be counted. The test is whether twenty or more redundancies are proposed looking forward.
• The ruling in Micro Focus v. Mildenhall provides a timely reminder of how Employment Tribunals handle redundancy proposals, redundancy pooling, and collective consultation responsibilities. However, this finding may be short-lived as the government intends to consult on making changes to the threshold as part of the new collective redundancy framework under the UK Employment Rights Act 2025.

In Micro Focus Ltd v Mildenhall, the EAT considered when collective redundancy consultation obligations under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) are triggered. Under TULRCA, there is a legal requirement for employers to carry out a collective consultation when proposing redundancies with twenty or more employees at one establishment in a period of ninety days. Employers that fail to comply with the collective consultation obligations will face penalties.

Mr Mildenhall, the employee in this case, was dismissed for redundancy on 29 July 2022 following a wide-scale cost-reduction and consolidation programme. He brought a claim for a protective award for failure to inform and consult under TULRCA. The Employment Tribunal, taking into account the number of redundancies in a rolling ninety-day period, found that the collective consultation duties had been triggered and awarded Mr Mildenhall the maximum ninety days’ gross pay. The employer, Micro Focus, appealed the finding that the duty to carry out collective consultation had been triggered.

By using the “forward and backward” approach established in a previous ruling, the EAT found that the Employment Tribunal was misdirected. That prior approach had been overtaken by a decision of the European Court of Justice (ECJ) in UQ v Marclean Technologies.

The EAT clarified that the collective consultation obligation applies when an employer proposes to make redundant twenty or more employees within the next ninety days, the approach should be prospective rather than retrospective. The assessment concerns what the employer was actually proposing for the future at the relevant moment, rather than looking back at how many dismissals ultimately occurred. However, the EAT also made clear that employers attempting to avoid their obligations will be subject to scrutiny. Tribunals may consider redundancies that appear to have purposely held back or staggered to prevent consultation in their threshold assessments.

Key Takeaways

Employers may wish to maintain well-documented redundancy procedure and intentions records to aid compliance. Clarity on this subject is particularly welcome, and the importance of following the correct protocol is of increasing importance in light of changes to the penalty for failure to consult in a redundancy in the UK, with the protective award rising from ninety days’ pay to 180 days’ pay per affected employee, effective from April 2026.

Ogletree Deakins’ London office and Global Reorganizations Practice Group will continue to monitor developments and will provide updates on the Cross-Border, Global Reorganizations, Reductions in Force, and United Kingdom blogs as additional information becomes available.

Roger James is a partner in the London office of Ogletree Deakins.

Lorraine Matthews, a practice assistant in the London office of Ogletree Deakins, contributed to this article.

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