Key takeaways
Forward-looking duty only
Employers only need to consider future proposed redundancies.
ET misapplied Marclean decision
EAT confirmed EU case does not alter UK approach.
Tribunals can infer bad faith
Tribunals may infer earlier proposals to prevent avoidance.
The EAT has held that employers are not required to look forwards and backwards when counting the number of dismissals for collective redundancy consultation purposes.
Legal background
Under our domestic redundancy legislation, as well as the duty to individually consult employees selected for redundancy, where 20 or more redundancies are proposed within 90 days at one establishment, the employer must collectively consult with appropriate representatives of affected employees. Under the express wording of the legislation, where an employer has already started consultation in relation to proposed redundancies, and further redundancies are later proposed, the initial batch of redundancies is ignored and not ‘counted’ unless the employer has acted in bad faith.
However, interpreting the underlying EU directive, the ECJ has previously held that employers proposing redundancies must look both backwards and forwards in time in order to determine whether there are or will be 20 or more dismissals in the 90-day reference period, i.e. they will need to take account of both past and anticipated redundancies to determine whether its duty to collectively consult has been triggered on a rolling basis (UQ -v- Marclean Technologies SLU (C 300/19) [2020] EUECJ C-300/19).
Factual background
M was employed in the sales division of a large international IT company. In September 2021, the company announced a large-scale reorganisation, which included redundancies in the sales division. After his redundancy dismissal on 29 July 2022, M brought various claims including a claim for a protective award for failure to collectively consult.
The employment tribunal:
Accepted M’s analysis of a company spreadsheet dated March 2022 showing at least 45 UK staff members in a single establishment were to be made redundant;
Concluded that there must have been a prior proposal to make those 45 employees redundant, which had crystallised in early January 2022; and
Relied on the Marclean decision to conclude that the employer had failed in its duty to collectively consult and made a protective award of 90 days' pay.
The employer appealed, arguing that the tribunal had misapplied the Marclean decision.
EAT decision
In the first appellate decision on the issue, the EAT clarified that the Marclean decision does not require employers to look backwards and forwards across a 90-day period when determining whether the collective redundancy consultation obligations are triggered.
The EAT held that the tribunal had misapplied the Marclean decision; this was not relevant to the question of quantifying the number of dismissals the employer was ‘contemplating’ because the decision related to a different part of the underlying EU directive. Accordingly, the Marclean decision does not assist in interpreting whether an employer is ‘proposing’ to dismiss under our domestic legislation, triggering the collective consultation duty. Under our domestic law, this is a forward-looking question – there is no need to retrospectively consider dismissals planned or executed previously – employers only need to look forwards not backwards.
However, the EAT emphasised that tribunals should be alert to an employer's attempts to circumvent its collective consultation obligations. Tribunals are entitled, in appropriate circumstances, to infer that an employer has made earlier redundancy proposals based on their subsequent actions.
