Micro Focus Limited v Mildenhall: collective consultation, “proposals” and staggered redundancies

Key facts

Mr James Mildenhall was employed by Micro Focus Limited from 2015 for over 6 years. In 2021, a large scale reorganisation and costs saving initiative across the Respondent’s organisation was commenced, following which Mr Mildenhall was dismissed by reason of redundancy in July 2022.

Upon his dismissal, Mr Mildenhall then brought claims for unfair dismissal, a redundancy payment, and for a protective award under s188 of Trade Union and Labour Relations (Consolidation) Act 1992 (‘TULRCA’). The claim for a redundancy payment was formally withdrawn by Mr Mildenhall so was accordingly dismissed by the Employment Tribunal (‘ET’). The remaining two claims (unfair dismissal, and a protective award under s188 TULRCA) went ahead to be considered by the ET.

Whilst redundancy is a potentially fair reason for dismissal, it was Mr Mildenhall’s position that the redundancy selection was unfair and that his employer, Micro Focus Limited, had failed to action their obligation to collectively consult. As expected, Micro Focus Limited resisted such claims, and did so through arguing that the redundancy  selection was fair, and that there was no engagement of any collective consultation obligation.

The Employment Tribunal Decision

The ET took a structured approach to the claims and concluded that:

-          The Respondent was in breach of the duty to collectively consult under s188 TULRCA as the Respondent had proposed to make redundant 20+ employees at one establishment within a period of 90 days or less. The ET based this finding on its interpretation of the 2022 Court of Justice of the European Union case of UQ v Marclean Technologies SLU that this case imposes an “obligation to look backwards as well as forwards for 90 days so that an employer who has proposed fewer than 20 redundancies and then subsequently proposes further redundancies will be caught by the section 188 obligations”.

-          The dismissal was unfair due to the Respondent’s failure to properly turn its mind to the pool for selection (as it was pre-determined that a colleague would take the role) and due to the Respondent not adequately consulting with Mr Mildenhall at a formulative stage.

Micro Focus appealed against the employment tribunal’s decision, arguing that the employment tribunal had misapplied the Marclean case. They also appealed the finding of unfair dismissal.

The Employment Appeal Tribunal Decision

The meaning of ‘propose’ in s188 TULRCA was central to this appeal, as well as what the case of UQ v Marclean actually decided. The Employment Appeal Tribunal (‘EAT’) took a differing view to the Tribunal below and held that the ET had misapplied the case of Marclean. This was on the basis that Marclean “is not about when an employer is contemplating collective redundancies at all”. Rather Marclean concerned whether the threshold number of redundancies is “effected” relating to “a very different concept” under Article 1(1)(a) of Directive 98/59/EC and its impact on Spanish law with no parallels to what ‘proposing’ means under s188 TULRCA.

The EAT held that the duty under s188 TULRCA is forward looking so the focus should be on what the employer is  proposing at the time for the future. It cannot be determined from the fact that that 20 or more dismissal occur within any period of 90 days that the employer, at some stage, was or must have been “proposing” all those dismissals.  However, Michael Ford KC sitting as the judge in the EAT highlighted that tribunals should scrutinise carefully the evidence where an employer 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. Dismissals do not happen by accident. Tribunals should be astute to see through artificial divisions of dismissals into batches, deliberate delaying to staggering of dismissals to take advantage of s188(3) or other means of circumventing the important duties in section 188.”

The appeal against the decision of unfair dismissal was not successful.

Key takeaways

Where staggered redundancies are proposed, there will not be a requirement for previous redundancies to be combined with subsequent redundancies over a 90 day rolling period for the purposes of triggering collective consultation. Michael Ford KC explained by way of example: “a second tranche of dismissals may be proposed more than two months after a first tranche, and the second tranche may result from events which were entirely unforeseeable when the employer proposed the first tranche. To contend that, viewing matters in the light of later events, the employer was “proposing” all the dismissals when it proposed the first tranche is to stretch “proposing” beyond its breaking point.”

However, there are still risks for employers looking to stagger dismissals as a tribunal may “legitimately infer an employer was at some stage ‘proposing’ sufficient collective dismissals to trigger the duties from the fact of their subsequent occurrence.” This may occur where there is already a redundancy consultation underway, but further redundancies are then required. If the employer has just commenced consultation with the first batch, there may be a risk that the employer would be “proposing” to dismiss 20 redundancies in total when adding together the two batches.

The EAT described  the term ‘proposing’ in s188 TULRCA as not so “inelastic” so that it is tied to a single moment in time. In addition, , tribunals are urged not to give ‘proposing’ a narrow interpretation.

It is crucial therefore that employers have clear evidence as to what was proposed, when and why. If then there is a requirement to undertake another redundancy process for “entirely unforeseeable events” within a short period of time, it will be essential to be able to also evidence this; otherwise there is a risk that a tribunal will infer these subsequent redundancies to be part of the previous ones which may trigger collective consultation obligations.  

Conclusion

This article has explored the case of Micro Focus Limited v Mildenhall which highlights the importance of employer’s understanding their duties of collective consultation. The EAT judgment serves as a slight source of relief for employers as it is clear from this judgment that the case of Marclean does not require previous redundancies to be combined with other redundancies over a 90 day rolling period for the purposes of determining whether the duty to collectively consult is triggered. Nevertheless, the consequences for not complying with collective consultation obligations are significant and are set to double under the Employment Rights Act 2025 in April 2026, increasing  the maximum protective award to 180 days’ pay. In the current landscape of increasing employment rights being afforded to employees, it is paramount that employers understand their duties and responsibilities across all aspects of employment.