When exactly is an employer ‘proposing’ redundancies so that it must start collective consultation?
When exactly is an employer ‘proposing’ redundancies so that it must start collective consultation?
What is the law?
Under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992, an employer must collectively consult appropriate employee representatives if it is proposing to dismiss 20 or more employees at one establishment within a 90-day period. Consultation must begin in good time and, in any event, before the first dismissal takes effect.
If an employer fails to comply, an Employment Tribunal can make a protective award of up to 90 days’ gross pay per affected employee. From Monday 6th April 2026, the Employment Rights Act 2025 doubles that maximum to 180 days’ pay, dramatically increasing the financial exposure, particularly in large-scale restructures.
What is the problem?
What if you do not initially plan to make 20 or more redundancies, but the numbers creep up as the restructuring develops? Can a tribunal later decide that you should have started collective consultation earlier, based on what ultimately happened?
This is exactly the issue the Employment Appeal Tribunal (EAT) grappled with in Micro Focus Limited v Mildenhall.
What happened?
Micro Focus Limited undertook a restructuring exercise that ultimately led to the dismissal of more than 20 employees within 90 days. An employee argued that the employer had failed to comply with its collective consultation obligations because, by the time events played out, the numerical threshold had clearly been met.
The Employment Tribunal agreed. Looking backwards at the total dismissals throughout the period, it concluded that the employer should have consulted employee representatives. Micro Focus appealed.
What did the EAT decide?
The EAT allowed the appeal. It decided that the tribunal had taken the wrong approach by focusing on outcomes rather than the employer’s position at the relevant time.
The correct test is whether the employer was proposing to dismiss 20 or more employees when the duty to consult would have arisen, not whether 20 or more dismissals eventually occurred within a rolling 90-day window.
Why did it make that decision?
The EAT reaffirmed that collective consultation is a forward-looking obligation. Tribunals should not simply tot up dismissals before and after a particular date and infer a breach from the numbers alone. That approach risks imposing hindsight liability and turning section 188 into a strict liability regime.
The EAT also stressed that the duty falls on the relevant employing entity. Employees are counted by reference to who employs them contractually, not throughout a corporate group merely because decisions are taken centrally or the business operates as a single economic unit in practice.
What should you do?
- Identify the proposal point. Be clear about when a redundancy proposal is formed and how many dismissals are genuinely contemplated at that stage.
- Record your thinking. Document assumptions, contingencies, and why the collective threshold was (or was not) met at the time decisions were taken.
- Count carefully. Focus on the employing entity, not the wider group.
- Reassess dynamically. If plans expand, revisit the collective consultation analysis immediately.
- Factor in higher penalties. With protective awards doubling from April 2026, timing errors now carry significantly greater financial risk.
