By Jo Seery, Professional Support Lawyer
Introduction
Mr Mildenhall was dismissed by Micro Focus Limited a large international company by reason of redundancy following a UK-wide reorganisation. He brought claims for unfair dismissal and for a protective award under section 188 TULRCA, alleging a failure to consult the appropriate representatives when proposing to dismiss 20 or more employees as redundant within a period of 90 days.
The Employment Tribunal upheld both claims. In relation to the failure to consult under S. 188 TULRCA, the tribunal relying on the European Court of Justice decision in UQ v Marclean Technologies held that that the employer was proposing to dismiss 20 or more employees within a 90 day when taking into account the number of employees it had dismissed in the past as well as those whom it proposed to dismiss in the future. It also found that Micro Focus Limited was the de facto employer of those employees proposed to be dismissed.
Mr Mildenhall’s claim for unfair dismissal was upheld as the tribunal found the employer failed to identify a pool for selection and consult with him. The employer appealed.
Key Issues
Collective Consultation and “Proposing” Dismissals
The Employment Appeal Tribunal (EAT) held that the Tribunal had misdirected itself by relying on UQ v Marclean Technologies to conclude that employers must “look backwards and forwards” over a 90-day period when determining whether the employer is proposing to dismiss 20 or more employees as redundant within a 90 day period.
The EAT confirmed that the obligation to collectively consult is not determined by the number of dismissals that have actually taken place within the 90 day period. The duty applies where there is a proposal to dismiss even if fewer than 20 employees are actually dismissed. The correct test remains a forward-looking assessment based on the employer’s plans at the time.
Identifying the Employer
The EAT also found that the Tribunal erred in treating Micro Focus as the “de facto” employer of all UK staff in light of the evidence that some employees made redundant were employed by different employers. For section 188 purposes, only employees who have a contract of employment with the relevant legal entity can be counted. The correct approach was for the tribunal to consider whether Micro Focus was proposing to dismiss 20 or more employees who had a contract of employees with it.
Unfair Dismissal
The employer’s appeal against the unfair dismissal finding was dismissed. The EAT upheld the Tribunal’s conclusion that the employer had failed to properly consider an appropriate redundancy pool and that consultation with Mr Mildenhall was inadequate and pre-determined.
Outcome
The EAT set aside the findings on collective consultation and the protective award, remitting those issues to the Tribunal for reconsideration. The finding of unfair dismissal stands.
Why This Matters
- Marclean does not change the domestic test for collective consultation obligations
- Section 188 TULRCA is triggered by what an employer is proposing dismissals in the future, not by retrospectively counting dismissals which have taken place.
Only employees who have a contract of employment with the relevant legal entity count towards the threshold in group structures.
