FAQ/Redundancy – when should redundancies be aggregated for collective consultation?

One of the hardest questions for employers managing redundancies is knowing when separate rounds need to be added together for collective consultation purposes. Get that wrong, and the consequences can be significant, particularly since the protective award doubled on 6 April to up to 180 days’ pay per affected employee.

There has been real uncertainty on this point, particularly after earlier case law led some tribunals to adopt a rolling 90-day approach. But in Micro Focus Ltd v Mildenhall, the Employment Appeal Tribunal has now clarified the UK position and brought much-needed focus to how employers should assess the threshold in practice.

So, what does that mean for employers? With the answer, on line from Glasgow, Lesley Makin:

Lesley Makin: “The EAT has made clear that the focus is on the proposal in front of the employer at that time. Under section 188, the question is whether the employer is proposing to dismiss 20 or more employees at one establishment within a 90-day period. So the exercise is forward-looking. Employers don’t automatically have to look back and add in dismissals that have already happened when deciding whether the threshold is met. That matters because getting the numbers wrong can expose employers to a protective award, and this decision gives businesses a clearer framework for assessing when the duty to consult is triggered.”

Joe Glavina: “So if a business has already carried out one round of redundancies and is now considering another, does it need to combine them?”

Lesley Makin: “Not automatically. The starting point is the proposal you are making at that stage. But employers do need to be realistic. If what looks like separate rounds is really one wider plan broken up into stages, a tribunal will look at the substance of what is happening, not just the way it has been described. So the message for HR is clearer, but it’s not risk-free. You still need to define the proposal properly and document the reasoning behind it.”

Joe Glavina: “And what about group restructures? Can employers combine numbers across different companies?”

Lesley Makin: “No. The EAT confirmed that the duty sits with the employer, meaning the legal entity employing the staff. So redundancies aren’t simply aggregated across a corporate group by treating a parent company as the employer. Each employing entity has to assess its own position under section 188. That makes the counting exercise more straightforward, but group and multi-site restructures still need careful analysis.”

We have added this programme to our FAQs series of programmes. To find them, just type ‘FAQ/redundancy’ into the search engine on the Out-Law website.