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 and in particular the impact of the ECJ’s decision in UQ v Marclean Technologies SLU (Marclean).
s.188, which implements the Collective Redundancies Directive (Directive), states that ‘Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals’.
Tribunal decisions have interpreted Marclean as requiring employers to look backwards and forwards from any individual dismissal to count whether 20 or more redundancies have occurred within 90 days, for the purposes of assessing whether collective consultation obligations have been triggered.
In the first UK appellate decision to consider Marclean, the EAT clarifies that Marclean does not determine when an employer is ‘contemplating’ or ‘proposing’ redundancies for the purposes of the Directive or section 188. The requirement for collective consultation applies when an employer plans to dismiss 20 or more employees within a 90-day period, making this a forward-looking issue based on the employer’s intentions at the time. The EAT further notes that section 188 concerns what the employer was actually proposing for the future at the relevant moment, rather than looking back at how many dismissals ultimately occurred or were proposed.
The decision in Marclean had been interpreted by tribunals as potentially imposing collective consultation obligations in relation to a dismissal for redundancy that had already occurred, if that dismissal plus later ones would reach the threshold number. This would potentially capture redundancy proposals made in successive batches. For example, where an employer made an initial proposal of 15 redundancies and then, needing to make further job reductions, proposed a further ten, the original proposal would not of itself trigger the obligation to collectively consult. However, if the second batch of ten redundancies are proposed to take effect in the same 90-day period which includes the first 15, the duty to collectively consult over all the proposed redundancies (some of which may already be underway or have been effected) may be triggered. This potentially conflicted with section 188(3) of TULRCA (that in determining how many dismissals are being proposed, no account is taken of employees in respect of whose dismissal consultation has already begun).
Micro Focus confirms that previous redundancies do not need to be combined with subsequent ones over a 90-day period to determine if collective consultation is required. However, the EAT notes that tribunals should be alert for employers attempting to avoid their obligations and may infer prior redundancy proposals from subsequent actions.
Facts
Mr Mildenhall was employed by the Micro Focus, running its Business Intelligence and Reporting within the sales division, from 1 December 2015 until he was dismissed by reason of redundancy with effect from 29 July 2022. He brought claims of unfair dismissal and for a protective award for failure to inform and consult under TULRCA.
After Micro Focus announced a large-scale reorganisation in September 2021 across its Support Operations, which included the Sales Division in which Mr Mildenhall worked, his manager was mandated to decide how to effect this cost saving. The ET found, accepting the Claimant’s evidence, that on a remote meeting/call in November 2021, he and other employees were shown an Excel document, listing each employee’s name and against it the proposed outcome, of continued employment, redundancy or transfer. At that stage, however, the Claimant was marked as “IN”, meaning it was envisaged he would be retained. By mid-January there was an ‘intense period of planning’ and a proposal to consolidate teams, leading to a second ‘master spreadsheet’ being created in March 2022. The ET held that this was after the time at which the proposals had been solidified. The ET accepted Mr Mildenhall’s evidence, based on the March 2022 spreadsheet, that at least 45 UK staff members were to be made redundant in just one business area. The ET considered there must have been a prior proposal to make that minimum 45 employees redundant, which had crystallised in early January 2022.
The Employment Tribunal’s decision
The EAT, considering s.188 TULRCA, said that ‘The ECJ in Marclean ruled that under the Directive, an employer proposing redundancies must look backwards and forwards for 90 days to determine whether there are sufficient redundancies to trigger the collective consultation obligations. Following Marclean , an employer who has proposed fewer than 20 redundancies and then subsequently proposes further redundancies within 90 days (making the total 20 or more) should as far as possible consult collectively with the first group as well as the second (although in practice there may be a limit on how much can be done, depending on how far the first redundancy exercise has progressed)’.
The ET concluded that there was enough evidence before it to reach a conclusion that on the balance of probabilities that there was a proposal to dismiss more than 20 employees of Micro Focus within a 90-day period including 29 April 2022 (presumably a typo for 29 July 2022).
The ET found that the Respondent did propose to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, which included the date on which Mr Mildenhall was dismissed on 29 July 2022. As such, section 188 imposed a duty on Micro Focus to collectively consult with affected employees including the Mr Mildenhall. The parties were in agreement that no collective redundancy consultation was undertaken. The ET awarded the maximum protective award of 90 days’ pay per affected employee.
EAT
The EAT considered in some detail the legal status of Marclean and how it is potentially relevant to the interpretation of s.188 , what Marclean actually decided about the meaning of the Directive, the effect of Marclean on the interpretation of s.188 and the ET’s application of s.188 in light of that.
The EAT held that the judgment of the ECJ in Marclean is binding case law authority on the meaning of the Directive and s.188 TULRCA must be interpreted, so far as possible, to achieve the result of the Directive as interpreted in Marclean.
The EAT considered that Marclean is not about when an employer is ‘contemplating’ collective redundancies at all. It is only about the meaning of “collective redundancies” in Article 1(1)(a) of the Directive and the correct method of determining whether the threshold number of redundancies has been ‘effected’ within the relevant period, for the purpose of deciding whether an individual dismissal forms part of those collective redundancies.
The cases on ‘contemplating’ do not suggest that collective consultation is triggered automatically simply by virtue of the employer having subsequently ‘effected’ the relevant number of redundancies within a relevant period (though in those circumstances it will often be a very likely finding of fact that the employer was at some prior stage ‘contemplating’ such dismissals). Rather the employer ‘contemplates’ collective redundancies in the future so long as they are envisaged to meet the relevant numerical and temporal thresholds, regardless of whether in fact the dismissals which are later ‘effected’ meet those thresholds.
As Marclean does not affect the meaning of ‘contemplating collective redundancies’ in the Directive it should not therefore be read as affecting the proper interpretation of the corresponding concept in s.188 of TULRCA , of whether an employer is ‘proposing’ 20 dismissals within 90 days. That is a question based on what the employer was ‘proposing’ for the future which is not necessarily answered by what in fact happens subsequently.
In any case, TULRCA does not define collective redundancies by reference to the number of dismissals which have been ‘effected’ within any period. Instead, it looks to whether the employer is ‘proposing’ to dismiss as redundant 20 or more employees within 90 days, a necessarily prospective question based on the employer’s plans. It applies even if fewer than 20 employees are actually dismissed or if the proposed dismissals do not occur within the envisaged period of 90 days or less but within a longer period.
The consistent and clear focus of these provisions is on what the employer is “proposing” for the future. A tribunal cannot deduce the answer to that question from the total number of employees dismissed, or proposed to be dismissed, within any period of 90 days by looking backwards and forwards, regardless of the circumstances. Rather, in applying s.188 a tribunal should focus on the statutory question of whether an employer was ‘proposing’ to dismiss the relevant numbers at the material time.
However, the EAT stressed that what in fact happens subsequently will often be highly relevant evidentially to what the employer was ‘proposing’ in the past. For example, a tribunal should scrutinise carefully the evidence where an employer in fact dismisses 20 or more employees within a period of 90 days but denies this was something it was at any stage ‘proposing’ in the past. Tribunals should be astute to see through artificial divisions of dismissals into batches, deliberate delaying or staggering of dismissals or other means of circumventing the collective consultation duties.
Further, s.188 does not refer to a single decision, nor to ‘a proposal’. An employer who proposes six dismissals on Monday, seven on Tuesday and eight on Wednesday may be said to be ‘proposing’ 21 redundancies that week.
The decision was remitted to the ET to decide if Micro Focus was ‘proposing’ the threshold number of dismissals of its employees.
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