Introduction
Indications from some of my clients suggest we may be entering a period when companies are, once again, looking at reducing headcount, so I thought I’d look at a recent relevant case that might be helpful. In what one might describe as a rare moment of sanity in the UK’s increasingly anti-employer legal environment, the Employment Appeal Tribunal (EAT) observes time only runs in one direction. The case of Micro Focus Ltd v Mr James Mildenhall [2025] EAT 188 pushes back against the creeping expansion of employment obligations that threatens to make the UK an impossible place to run a business. Offering a restrictive interpretation of the controversial European Court of Justice (CJEU) decision in Marclean, the EAT has—at least temporarily—prevented yet another trap from springing on unsuspecting employers.
The Background: Another Minefield for Employers
The collective consultation requirements under Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) require that when “proposing to dismiss as redundant” 20 or more employees at one establishment within 90 days or less, employers must navigate a more complex, collective consultation process—originally imposed by the EU Collective Redundancies Directive, which, naturally, uses different language just to keep things interesting.
The penalties for getting this wrong are severe and getting worse. Protective awards currently stand at up to 90 days’ pay per affected employee—already a crushing burden for businesses trying to restructure to survive. But in what seems to be a deliberate attempt to make business restructuring as painful as possible, these are set to increase from April 2026. Combined with the Employment Rights Act 2025’s removal of the unfair dismissal compensation cap and reduction of the qualifying period to just six months (a compromise from the initially threatened day-one rights), restructuring is becoming increasing perilous.
The Case: How Employers Almost Lost Again
Mr. Mildenhall was made redundant from his role at Micro Focus Ltd in early 2022. He brought claims including unfair dismissal and breach of collective consultation obligations. In what has become a depressingly familiar pattern, the Employment Tribunal (ET) initially found in his favor, ruling that Micro Focus had somehow failed to comply with Section 188 requirements despite acting in good faith.
The ET’s reasoning was a masterclass in judicial creativity—based on its interpretation of the CJEU’s Marclean decision, it believed employers should look both backwards and forwards when determining whether the 20-employee threshold had been met. This Kafkaesque interpretation suggested that if an employer made 10 redundancies in January and then proposed 10 more in March, it would retrospectively trigger the collective consultation requirement for all 20 dismissals. In other words, employers could find themselves in breach of obligations that didn’t exist when they initially acted.
The EAT’s Decision: A Brief Respite from the Madness
In a welcome outbreak of common sense, the EAT firmly rejected the Employment Tribunal’s interpretation, effectively accepting that time runs forward and that employers cannot predict the future. Deputy High Court Judge Michael Ford recognised that the ET had fundamentally misunderstood both Marclean and the nature of Section 188 obligations— one wonders how many employers have already fallen victim to similar misinterpretations.
Key findings that might help employers survive:
- “Proposing” Actually Means What It Says: The EAT confirmed that “proposing” refers to future planned actions, not past ones. An employer cannot retrospectively be found to have been “proposing” dismissals that had already happened. The fact this needed clarification speaks volumes.
- The Marclean Containment: The EAT limited the damage from Marclean by clarifying it only concerned determining whether a dismissal already “effected” formed part of a collective redundancy exercise. It didn’t create the time-traveling obligations the ET had invented.
- Some Flexibility Remains (For Now): The EAT acknowledged that “proposing” isn’t tied to a single moment. An employer making multiple dismissals over a few days might be “proposing” them collectively. However, this is a question of fact for tribunals in a case by case basis.
- Corporate Structures Still Mean Something: At least the EAT recognised that separate legal entities are actually separate. The ET’s attempt to aggregate workforces across distinct employers was rejected—though I suspect this reprieve might be temporary given the direction of travel in employment law.
What This Means for Employers
This decision offers a small victory in what is increasingly looking like a losing battle for UK employers:
The Limited Good News:
- For now, employers don’t need to count backwards when determining consultation triggers
- Genuine business-driven phased redundancies won’t automatically create retrospective liability
- The focus remains on actual proposals rather than creative judicial arithmetic
The Harsh Reality:
- Tribunals will scrutinise documentation and decision-making closely, particularly where timing/threshold issues arise.
- The vague concept of rolling redundancy proposals creates yet more litigation risk
- Poor documentation—inevitable when businesses are focused on survival rather than paperwork—will be weaponised against employers
- It remains to be seen whether the point will be tested further on appeal.
- Even this modest protection could be swept away by the next wave of “reforms”
Practical Takeaways (staggered redundancies)
- Identify the decision point(s) when dismissals became a proposal (who decided what, when).
- Record the numbers contemplated at that time and why.
- If numbers may reach 20+, treat it as a collective consultation risk and take advice early.
- Don’t assume you can “sequence” to avoid duties—ETs will scrutinise intent and evidence.
Survival Tips for Employers
Given this increasingly hostile environment and the certainty of more changes ahead, employers now, more than ever, must adopt defensive strategies:
- Document Everything: In a world where tribunals appear to assume employer guilt, obsessive record-keeping is your only defense. Document every decision, every meeting, every consideration—even though this diverts resources from actually running your business. As I have said in so many training courses, always assume you will have to defend you decision in front of a judge.
- Assume You’re Being Watched: Any business decision will be scrutinised for hidden motives. Structure redundancies based on clear business needs, knowing that even legitimate decisions will be viewed with suspicion.
- Build Your War Chest: With protective awards doubling, compensation caps disappearing, and the qualifying period for unfair dismissal claims dropping to just six months, the cost of any misstep is becoming potentially catastrophic. Budget accordingly.
- Consider Your Options: As the UK becomes increasingly hostile to employers, consider whether restructuring operations to minimise headcount is the prudent long-term strategy.
- Prepare for Worse: The April 2026 doubling of protective awards and 2027’s new thresholds are just the beginning. The trajectory is clear—more obligations, higher penalties, less flexibility.
The Broader Context: A System Stacked Against Employers
This decision arrives as the UK employment law system reaches new heights of dysfunction. With over 500,000 cases clogging the tribunal system, employers face years of uncertainty even when they’ve done nothing wrong. The recently passed Employment Rights Act 2025 will add to that number and represents the latest assault on business flexibility, with its removal of compensation caps and reduction of qualifying periods to six months (though even this “compromise” from day-one rights is hardly employer-friendly), sending a clear message: the UK government views employers as exploiters to be controlled, not job creators to be supported.
The EAT’s relatively pragmatic approach in Mildenhall is a rare acknowledgment that businesses need some ability to make decisions without paralysis. But let’s be clear—this is a small island of reason in an ocean of anti-employer sentiment. The protective purpose of the legislation increasingly translates to “protect employees at any cost to business.”
Looking Ahead: More Pain to Come
While Mildenhall provides temporary relief, the uncertainties and risks remain overwhelming:
- The distinction between completed and continuing redundancies remains a minefield
- Higher courts might abandon even this modest protection, especially given the political climate
- The post-Brexit ability to depart from EU law is meaningless when UK lawmakers appear to be even more anti-employer than Brussels
Conclusion: A Pyrrhic Victory?
The Micro Focus v Mildenhall decision is like finding a small shelter in a hurricane—welcome, but hardly cause for celebration. Yes, employers can take some comfort that collective consultation obligations aren’t quite as crazy as the Employment Tribunal suggested. But this is a defensive victory in a war employers are clearly losing.
The prospective approach to “proposing” confirmed by the EAT aligns with basic logic and language—the fact this is noteworthy is alarming in itself. The broader assault on employers continues unabated: six-month qualifying periods for unfair dismissal (and we should be grateful it’s not the day-one rights originally threatened), unlimited compensation, doubled protective awards, and whatever fresh horrors the government dreams up next.
UK businesses face a stark choice: accept the ever-increasing burden of employment law and price it into your business model, or consider whether the UK remains a viable place to employ people at all. The message from government, reinforced by most tribunals, is clear: employers are guilty until proven innocent, and even then, they’re probably still guilty of something.his
For those bold enough to continue employing people in the UK, use this decision wisely. Document everything and remember— as ever, if would like to discuss or any other employee management issue with me Get In Touch
This blog post is for general information purposes only and does not constitute legal advice.
Author Note: This analysis is based on the Employment Appeal Tribunal decision of December 19, 2025.