J Ellard & Ors v Alliance Transport Technologies Limited UK [2025] EAT 169

[2025] EAT 169Case No EA-2024-000833-RS
EMPLOYMENT APPEAL TRIBUNAL
Venue Rolls Building, Fetter Lane, London, EC4A 1NLDate 22 October 2025
Before
HER HONOUR JUDGE TUCKER
Between
MR J ELLARDAppellantMR K HULSEAppellantMR L WARRENAppellant- and –
Between
ALLIANCE TRANSPORT TECHNOLOGIES LIMITEDRespondentRevised
Ms N Toner (instructed by NUALAW) for Appellants for The Respondent did not appear nor was representedHearing Hearing date: 21 & 22 October 2025
JUDGMENTSUMMARYTrade Union Rights and Redundancy:The Appellants, Claimants before the Tribunal, each made applications for a protective award under s.189 of the Trade Union and Labour Relations (Consolidation) Act 1992 (The 1992 Act/ TULRCA 1992). They asserted that the duty to enter into collective consultation set out in s.188 of the 1992 had arisen and that there had been a breach of that duty.The Respondent organisation employed approximately 51 employees. Financial pressures arose. In early April 2023 it was seeking additional investment and considering options for future. It gave notice of intention to appoint administrators and a further such notice at the end of the month. On 2 nd May 2023 it entered administration and a number of staff were dismissed as redundant with immediate effect, notices being sent to that effect on 9 th May 2023. On 5 th May 2023 all but 6 employees were dismissed and the business was wound up.An Employment Judge held that employees dismissed on 5 th May 2023 were entitled to a protective award, but those dismissed on 2 nd May 2023 were not. He found that there had been an intention to sell the business as a going concern and that there was not a proposal to dismiss as redundant 20 or more employees on 2 nd May 2023 when the Appellants were dismissed on that day.The Appellants argued that the Judge had failed to correctly apply s.188 of the 1992 Act and, in particular, failed to consider whether the employer was, at the relevant time, “proposing to dismiss” within a period of 90 days, 20 or more employees; that the Judge erred in stating that it was immaterial whether there was a strong or weak prospect of the business being rescued or sold as a going concern. Finally, it was contended that the Judge’s conclusion that there was a clear intention to sell the business as a going concern as of 2 nd May 2023 was perverse and contrary to the evidence before the Tribunal, including a report from the administrators.The appeal was allowed on all three grounds. The question was not whether there was a proposal to dismiss as of 2 nd May more than 20 employees; it was whether the employer was proposing to dismiss as redundant 20 or more employees within a period of 90 days. The difference between ‘a proposal’ and ‘is proposing’ is not mere semantics. “Proposing to dismiss” involves and includes current and ongoing consideration of future events, albeit events which are not certain.Whilst the duty to consult will not arise where closure of a business is merely mooted as a possibility, the duty to consult was triggered where it is established as a clear, albeit provisional, intention. The Tribunal erred in focusing on the need for ‘a proposal’ and omitted, at key points in its analysis, the possibility that the required proposal may be provisional, and in respect of dismissals which may occur over a 90 day period. An employer must also ‘project forward’ so as to ensure that consultation is begun in good time.UK Coal Mining Ltd v NUM (Northumberland Area)[2008] ICR 163; Keeping Kids Co (In compulsory liquidation) v Smith[2018] IRLR 484; and E Ivor Hughes Educational Foundation v Morris[2015 IRLR 696 considered and applied
[1]This is an appeal against the decision of an Employment Tribunal, sent to the parties on 22 April 2024. The Employment Judge that heard and determined the case and decision against which there is now an appeal was Employment Judge Brewer, who was sitting in the Midlands East Tribunal.[2]In this judgment I refer to “the Appellants” as the Claimants and to the Respondents to this appeal as “the Respondents”, as they were before the Tribunal.[3]There were nine Claimants in the proceedings before the Tribunal. All of those Claimants had worked for the First Respondent until they were dismissed by redundancy in early May 2025. The claim that they made was for a protective award under section 186 of the Trade Union and Labour Relations (Consolidation) Act 1992, which I will refer to as “the 1992 Act” or “TULR(C)A 1992”.[4]The Second Respondent, the Secretary of State, was joined as an interested party because payments of the awards to those Claimants may be paid from National Insurance funds where an employer is insolvent, pursuant to section 182 of the Employment Rights Act 1996.[5]Before the Tribunal, the Second Respondent took an entirely neutral position. The First Respondent played no part in the proceedings and did not appear to have entered a Response.[6]Before this appeal tribunal, the Secretary of State is no longer a Respondent. The First Respondent, now in administration, has informed the EAT that it does not oppose the appeal.[7]In its decision, the Tribunal found in favour of six out of the nine Claimants. Three other Claimants were unsuccessful. It is those three unsuccessful Claimants who now bring this appeal. The Claimant’s representative informed the EAT that before the Tribunal each Claimant had provided a written witness statement. In addition, there was, within the bundle, some evidence in the form of screen shots, texts or WhatsApp messages which had been sent to some of the Claimants by one of the directors, and other messages sent by one of the engineering managers to some of the Claimants.[8]In addition, before the Tribunal there were extracts from the administrators’ statement of proposal. Those documents have also been before the EAT. The facts.[9]The First Respondent employer was a company which specialised in the manufacturing of electronic and hybrid commercial vehicle parts. It operated from two sites within the UK. In total, it employed approximately 51 employees. It did not recognise any trade unions.[10]The First Respondent had received investment at the end of 2021 to provide funding to support new product development and expansion of the business. It began to invest in a new energy storage system for use by its customers in commercial vehicles. The new storage system was anticipated to be a big step forwards in terms of hybrid efficiency, particularly for use in buses.[11]Sadly, however, a number of events took place which caused significant difficulties for the First Respondent company. First there were delays in the project, secondly, technical complexities arose, and, thirdly, costs were higher than anticipated. This put significant pressure on the Respondent’s cashflow.[12]These points -- the summary that I have just set out about the difficulties that the First Respondent faced -- were taken directly from the summaries set out by the administrators in their statement of proposals at paragraph 2.3.[13]The Tribunal, in its Judgment, found that on 18 April 2023 one of the Respondent’s directors, a Mr Keane, sent an email to all staff in which he sought to update employees following what he referred to as “media speculation” about the future of the business. The email stated as follows:
“In recent months, we have faced a number of challenges, not least of which is the fact that it has taken longer than we initially expected to bring our new … products to market. The impact of these challenges on trading means additional investment is required to ensure our business has a stable platform upon which we can continue to grow in the future. In response to this, we recently appointed independent advisors to help us seek additional investment for our business. The good news is that since embarking on this process, we have received positive interest from a number of parties and so we are currently working hard, alongside our advisors, to ensure we secure we the investment that we need. “In the meantime, however, we have had to take legal steps to protect the position of our business to afford us the time to be able to find a solution to the challenging situation we face, including the filing of a notice of intention to appoint administrators. I appreciate that this news will be very unsettling for you. So over the coming days, we will endeavour to keep you updated as the process progresses. In the meantime, please feel free to speak to anyone on the management team if you have immediate questions or concerns, and we will do our best to provide clarity where we can. Best regards.”
This was the only evidence of any communication from the directors to the Claimants prior to the dismissal.[14]The Tribunal recorded, however, that an engineering manager, a Mr Forbes, had messaged, either by WhatsApp or text, some staff on two further occasions. First on 27 April 2023 and then on 2 May 2023. The message of 27 April 2023 read as follows:
“Gents, hopefully you are aware that the business is looking for further investment as BGF [one of the initial investors in the First Respondent] are wanting out. This could be in the form of another investment team or that someone buys us. That process is fairly well underway and, at this moment in time, I can tell you that there are two interested businesses with good synergies with what we already do that are interested and further offers have been made on all parts of the business. I know this hasn’t been an easy time for us all, but we are hoping to have some news at some point next week with what is happening. We have pushed for this week, but that is looking unlikely. As always, if you want to call me to discuss it further, please feel free. Sorry that this is a message, but it was the easiest way to tell you all … [and the message just then states ‘read more’].”
On 2 May 2023, the message from Mr Forbes reads as follows:
“Gents, we have just had a meeting in Clown & Featherstone where we have been told the company has gone into administration. This was always going to be the case as no one would ever buy the legacy. We have been split into two groups, some of which have been told they are being made redundant with immediate effect. All of you are not on the list. The administrators will now try and progress the sale of the business. I will stop if you have any questions. Please give me 15 minutes and then feel free to call.”
[15]On 4 May 2023, messages were exchanged about fuel cards being frozen again. On 5 May 2023 Mr Forbes sent the following message:
“Gents, I am really sorry for the news. Never expected to go that way.”
The rest of the message contained information about other possible work or employment opportunities with other organisations.[16]The Employment Judge recorded that the administrators, Interpath, had provided a report on what had actually transpired during the administration. The Judge set out the following matters from that report at paragraph 13 of his judgment. “[13.1] Interpatch were introduced to the First Respondent in April 2023 and were engaged to undertake an options process. At that time, there were several potential interested parties who were identified and contacted. “[13.2] An initial notice of an intention, that is an intention to appoint administrators, was filed 14 April 2023 to allow the business more time to explore its available options. A second notice of intention was filed on 27 April 2023 to allow sufficient time to progress offers for the business. “[13.3] The joint administrators were appointed on 2 May 2023. “[13.4] Following the appointment of joint administrators, the strategy was to continue to trade the business in the short term [while] a search for an acquirer continued. Initially, 15 of the 51 total staff were identified as non business critical and were made redundant. “[13.5] On 5 May 2023 confirmation was received from the final interested party that an offer for the business as a going concern would not be forthcoming. At that stage, the majority of the remaining workforce was made redundant and a wind down of the company was initiated.” The Judge recorded that Mr Ellard, Mr Hulse and Mr Warren (the three Appellants/Claimants) were dismissed as redundant on 2 May 2023 and all remaining Claimants dismissed as redundant on 5 May 2023.[17]The EAT’s attention was drawn, in submissions, to the employment contract for one of the Claimants, Mr Ellard. He was employed as a Sales and Managing Director of the First Respondent. His contract recorded that the role comprised day-to-day management of key accounts of the business development team, ancillary sales channels and overall responsibility for the marketing activities and function of the business, reporting into the Commercial Director. Mr Ellard received a letter dated 9 May 2023 which confirmed that his employment was terminated by reason of redundancy with effect from 2 May 2023. The Tribunal’s decision.[18]As set out above, the Claimants’ -- Mr Ellard, Mr Hulse and Mr Warren -- claims were dismissed. The other claims Claimants’ claims for a protected reward succeeded. The Judge found that the protected period was 90 days.[19]The Judge identified that the issue in each case was whether the individual Claimants should have been included in collective consultation within the meaning of section 188 of the 1992 Act. The Judge recorded the matters which I have set out above. He noted that the Claimants who bring this appeal were all dismissed with effect from 2 May 2023, but that the other Claimants were dismissed on 5 May 2023.[20]Key parts of the Judge’s conclusions and reasons for those conclusions were set out in paragraphs 16 to 28 of the Judgment. “16. Given that all of the Claimants were assigned to Chesterfield it is not necessary for me to determine whether in this case there was one establishment across two sites two establishments. 17. What is significant, and indeed the key point in this case, is the question of the proposal to dismiss. 18. Essentially the Claimants argue that the appointment of the administrators, or if not that, then the potential for the business to close effectively amounted to a proposal to dismiss more than 20 employees within a 90 day period at one establishment. 19. The question of what amounts to a proposal to dismiss has been the subject of a number of domestic and European decisions over many years largely because the wording in the Collective Redundancies Directive refers to dismissal is being ‘contemplated’ whereas in TULRCA the wording used is ‘propose’ and there has been much debate about whether contemplation is earlier than proposing and essentially there has been no satisfactory conclusion to that debate. 20. As to when collective redundancies are proposed, domestically the leading case is UK Coal Mining Limited v NUM (Northumberland Area) and another 2008 ICR 163 EAT. 21.In that case the then President of the EAT said that it is not sufficient to amount to a proposal to dismiss as redundant “when the closure is mooted as a possibility”. He said that redundancy dismissals must be “fixed as a clear, albeit provisional intention”. 22.Going into administration is not synonymous with business closure. When a company goes into administration, they have entered a legal process (under the Insolvency Act 1986) with the aim of achieving one of the statutory objectives of an administration. This may be to rescue a viable business that is insolvent due to cashflow problems. An appointment of an administrator (a licensed insolvency practitioner) will be made by directors, a creditor or the court to fulfil the administration process.23. The administration puts in place a statutory moratorium. This is a ‘breathing space’ that frees a company from creditor enforcement actions, while financial restructuring plans are prepared to rescue the company as a going concern where possible. This may take the form of a sale to an unrelated party. If the business cannot be reasonably saved, the administrator will aim to achieve a better return for creditors than would be likely if the company were wound up (without first being in administration).24. In my judgment it is entirely clear at the date Interpath were engaged and subsequently appointed as administrators the clear intention was to sell the First Respondent as a going concern. It does not seem to me to matter whether there was a high, medium or low prospect of that.25. It is not uncommon for administrators to make redundancies immediately to reduce overheads and what occurred in this case was that 15 employees were identified as non-critical to the continued running of the business during the period where a sale was a possibility. Those are the employees dismissed on 2 May 2023. In my judgment at that stage there was no proposal to dismiss as redundant 20 or more employees of the First Respondent.26. I am bolstered in this view by all the written evidence before me including the text messages from Mr Forbes and the report from the administrators all of which suggests there were genuine efforts being made to find a buyer for the business. There is no evidence to support Ms Toner’s argument that all employees were bound to be dismissed and therefore there was only one “proposal” covering all the employees. I go back to the judgment in UK Coal Mining Limited which confirms that there must be a fixed, clear intention to amount to a proposal to make collective redundancies and, as I have found, all the evidence here suggests that the proposal to make the majority of staff redundant was not made until the last possible purchaser was no longer interested in buying the business and that appears to have occurred on 5 May 2023.27. In relation to the employees dismissed on 2 May 2023, given that there were only 15 of them that proposal did not reach the threshold which required collective consultation under the 1992 Act, and it follows that the claims of Mr Ellard, Mr Warren and Mr Hulse fail and are dismissed.28. However, for the remaining Claimants who were dismissed on 5 May 2023, they clearly should have been the election of representatives, information should have been given to those representatives about the proposals and collective consultation entered into, none of which was done, and in the absence of any further evidence I find that the protected period is 90 days.” The grounds of appeal and submissions.[21]The Appellants advanced three grounds of appeal. First it was submitted that the Tribunal identified and then asked the wrong legal question. In so doing, it failed to apply the correct legal test, ignoring an applicable statutory provision regarding the duty to undertake collective consultation.[22]It was submitted that in paragraphs 25 and 27 of the judgment the Tribunal excluded consideration of the words “at one establishment within a period of 90 days at or less”. It was submitted that, in error, the Tribunal focused only on the dismissals which took place on two separate days, albeit closely connected in time.[23]However, it was submitted by focusing on those individual events, i.e., the individual dates of the dismissal, the Tribunal failed to consider the question of whether the employer had been proposing to dismiss as redundant 20 or more employees within a period of 90 days or less. It was submitted that the Tribunal erred in considering the dismissals on 2 May in isolation from the others.[24]It was submitted that the Judge failed to cite or make any reference to section 188(3) TULR(C) Act 1992, which provides as follows:
“(3) In determining how many employees an employer is proposing to dismiss as redundant no account shall be taken of employees in respect of whose proposed dismissals consultation has already begun.”
It was submitted that this was relevant in this case because that provision tended to suggest that a Tribunal should not have regard to dismissals when no consultation had already begun. The Tribunal in this case found in paragraph 15 that there was no consultation regarding any of the dismissals. It was submitted therefore that the Tribunal in error failed to include these matters in its consideration.[25]Secondly, it was submitted that the Tribunal erred in its application and interpretation of the EAT’s decision in UK Coalmining Limited v National Union of Mineworkers [2008] ICR 163. In particular, it was submitted that at paragraph 26 the Tribunal failed to cite relevant words from the judgment by omitting the words “albeit provisional” from its self-direction. This, it was submitted, was significant because it led to the Tribunal applying an overly stringent test, namely that in order to trigger the duty to consult, there needed to be a fixed, clear intention, i.e., something more definite, than the words of the statute and authorities require.[26]It was submitted that the consequences of that interpretation would be that the duty to consult would only, or would likely only, ever to arise on actual dismissals taking place, rather than in anticipation of proposed dismissals, which may or may not ever in fact take place.[27]In support of this proposition, the appellants relied upon paragraph 27 of Eady P’s judgment in Keeping Kids Company (in compulsory liquidation) v Smith and Others & the Secretary of State for Business, Energy and Industrial Strategy EAT-0057-2017. That case is also reported at [2018] IRLR 484. That paragraph provides as follows: “27. The obligation is, further, to consult “in good time” (section 188(1A)). Specific time periods are then set out (section 188(1A)(a) and (b)) but, at a more basic level, it is common ground that this must mean it starts in good time to allow meaningful consultations to take place, see TGWU v Ledbury Preserves (1928) Ltd [1985] IRLR 412 EAT and R v British Coal Corporation, ex parte Price [1994] IRLR 72 Div Ct. As the ET recognised (see paragraph 72), the obligation is not that there must be consultation at the earliest opportunity but the employer does need to project forward, to assess when consultation must start to ensure it is “in good time” for meaningful consultations to take place, which may require that the process start before all the information specified at section 188(4) is available (see MSF v Refuge at paragraph 39).[28]Thirdly, and finally, it was submitted that the Tribunal’s decision was perverse and directly contrary to the evidence before it. In particular it was submitted that, in error, the Tribunal determined that the administrators’ statutory objective fell under section 3(1)(a) of schedule B of the Insolvency Act 1986, namely rescuing the company as a going concern. That, it was submitted, was in direct contradiction and opposition to the best evidence available as to the administrators objectives, which was set out in the statement of proposals which stated:
“After a series of discussions with no formal offers received for the business on a going-concern basis, the administrators were appointed on 2 May 2023. No offers were received from any party to acquire the business as a going concern following the sales process. Therefore rescuing the company in accordance with 3(1)(a) is not achievable.

(b) ”

[29]Further, it was submitted that the Tribunal’s judgment reflected a lack of understanding of the definition of “administration” and of the administration process. In particular in paragraph 23

the Judge stated:

“Administration puts in place a statutory moratorium, creating a breathing space which frees a company from the risk of creditor enforcement actions whilst financial restructuring plans are prepared to rescue a company as a going concern where that may be possible.”
It was submitted that whilst that description was not incorrect, what was described within that paragraph was more accurately attributable to the period from which a notice of intention to appoint administrators was filed with the court. In this case, that took place on 12 April 2023, in order to escape mounting pressure from creditors, and then again on 27 April 2023 until 2 May 2023.[30]It was submitted that, on the evidence, it was that which had provided the breathing space. Nonetheless, further evidence clearly showed that attempts made during that period to sell the First Respondent, or part of it, as a going concern had been unsuccessful. Further, it was submitted that the evidence was that no formal offers were received to purchase the business or at a later date.[31]It was submitted that the Tribunal’s misunderstanding of the evidence before it was reflected in paragraph 24 of the judgment. It was submitted that, whilst at the point of engagement of the administrators, some considerable time before the first redundancies took place on 2 May 2023, there had been a hope to save the business by selling it as a going concern, the clear evidence before the Tribunal was that the chances of that taking place diminished over time and were likely to have all but evaporated entirely by 2 May 2023 and had done so by 5 May 2023. Significantly, it was submitted that the chances of achieving that hope were slim even at the point when the First Respondent entered administration.[32]It was submitted that the Tribunal’s comments that it did not matter whether there was a high, medium or low prospect of any sale, as set out in paragraph 24 of the judgment, was an error of law. It was submitted that the factual analysis of the likelihood of sale as a going concern was critical to the point which the Tribunal was required to determine: whether or not the employer was proposing to dismiss as redundant a number of employees within a particular period. It was submitted that by stating that that was irrelevant, the Tribunal excluded from its consideration a key matter, namely the need to examine the circumstances of the case in detail in order to conclude whether or not the employer was proposing or had been proposing to dismiss as redundant 20 or more employees within a period of 90 days.

The relevant legal principles, analysis and conclusions

[33]An obligation to consult collectively is placed upon employers with the UK by the provisions of section 188 of The Trade Union and Labour Relations (Consolidation) Act1992, often referred to as TUR(C)A 1992 or the 1992 Act: “(1) Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals. (1A) The consultation shall begin in good time and in any event— a) where the employer is proposing to dismiss 100 or more employees as mentioned in subsection (1), at least 45 days, and b) otherwise, at least 30 days,before the first of the dismissals takes effect. (2) The consultation shall include consultation about ways of—(a) avoiding the dismissals,(b) reducing the numbers of employees to be dismissed, and(c) mitigating the consequences of the dismissals and shall be undertaken by the employer with a view to reaching agreement with the appropriate representatives. (3) In determining how many employees an employer is proposing to dismiss as redundant no account shall be taken of employees in respect of whose proposed dismissals consultation has already begun.” a) where the employer is proposing to dismiss 100 or more employees as mentioned in subsection (1), at least 45 days, and b) otherwise, at least 30 days,before the first of the dismissals takes effect.

(b) reducing the numbers of employees to be dismissed, and

[34]Where there has been a failure to consult in accordance with those provisions, affected employees may seek an award pursuant to section 189 of the 1992 Act. As can be seen from the words of the statute which I have just set out, the duty to consult arises where an employer is proposing to dismiss the requisite number of employees. I consider that it is important to make a number of points at the outset:(a) The duty is not triggered by actual dismissals taking place.(b) I consider it is particularly important to focus on the specific wordings of the statute. The duty to consult is triggered by the employer “proposing to dismiss”, not by “a” proposal to dismissal or “the” proposal to dismiss. That is not, in my judgment, mere semantics, but reflects what an employer must consider when determining whether or not the duty arises. I return to this further below.(c) The issue of whether an employer is proposing (to dismiss) the requisite number of employees must be considered in respect of a specified period, that is of 90 days or less.(d) The duty to consult is a duty to consult in good time. “In good time” is deemed to be a minimum of 45 days where the employer is proposing to dismiss 100 employees and a period of 30 days in advance of the first dismissal in all other cases.[35]The duty to consult set out in the 1992 Act is the national implementation of the Collective Redundancies Directive 98/59/EC. The statutory provisions in the 1992 Act are matters of retained EU law following the UK’s departure from the European Union. The EU Directive used different language to that set out in section 188, stipulating that the duty do consult arose when an employer is contemplating collective redundancies.[36]As the Tribunal Judge in this case correctly identified, that difference in language has led to a number of authorities and domestic debate regarding how and whether the national implementing legislation was compatible with, or could be read compatibly with, the EU legislation.[37]In R v British Coal Corporation ex parte Vardy [1993] IRLR 104 it was held that the word “contemplating” was substantially different to that of proposing, the latter relating to a state of mind which was much more certain and further along the decision-making process than the former.[38]Further, it was held that the national legislation could not be read compatibly with the EU directive, a view which was subsequently restated by the EAT in MSF v Refuge Assurance Plc[2002] IRLR 324.[39]After a decision in the European Court in a case called Akavan Erityisalojen v Fujitsu Siemens Computers (C-44/08) [2009] IRLR 944, there was a suggestion that the Court of Justice had interpreted the word “contemplating” in a narrow fashion, thereby more closely aligning it to the meaning of the word “proposing”, suggesting some sort of developed plan.[40]However, in three decisions of the EAT, including the UK Mining Limited case I have referred to, and a decision of Kelly v The Hesley Group Limited, three Presidents of the EAT have declined to depart from the established decisions in Vardy and MSF v Refuge Assurance Plc. The last of the three decisions is that of Eady P the in Keeping Kids Companycase. She succinctly summarised the position at paragraphs 24 to 26:
“24. The duty to consult under section 188(1) TULRCA arises when an employer is “proposing to dismiss” the requisite number of employees. In thus implementing Article 2(1) Council Directive 98/59/EC (“the Collective Redundancies Directive”), the UK has thus focussed on the point at which the employer is proposing the dismissals rather than adopting the language of Article 2(1), which imposes the requirement to consult at the point when the employer “is contemplating collective redundancies”. 25. That difference in language has led to a degree of debate in domestic law (and commentary) as to how “proposing” is to be interpreted for these purposes. In USA v Nolan [2011] IRLR 40, the Court of Appeal identified the possible nuances of approach by posing the following question: “57. … whether the consultation obligation arises (i) when the employer is proposing, but has not yet made, a strategic business or operational decision that will foreseeably or inevitably lead to collective redundancies; or (ii) only when that decision has actually been made and he is then proposing consequential redundancies?” 26. In R v British Coal Corporation and Secretary of State for Trade and Industry, ex parte Vardy [1993] IRLR 104 Div Ct and MSF v Refuge Assurance plc [2002] IRLR 324 EAT (followed in UK Coal Mining Ltd v NUM (Northumberland Area) [2008] IRLR 4 EAT and Kelly v The Hesley Group Ltd [2013] IRLR 514 EAT), it was concluded that the obligation does not arise simply when the employer first thinks about or contemplates redundancies; it means something more than that, albeit something less than a final decision. Notwithstanding the potential debate as to this approach, all parties to this appeal have proceeded on the basis that this is correct and that (see MSF v Refuge at paragraph 42): “42. … ‘proposes’ relates to a state of mind which is much more certain and further along the decision-making process than the verb ‘contemplate’ …”
For the avoidance of doubt, although not an argument with which I have had to engage on this appeal, for the reasons given in Kelly, I would, in any event, consider that, at EAT level, it would be inappropriate to adopt any different position (see Kelly at paragraphs 15 to 16) “57. … whether the consultation obligation arises (i) when the employer is proposing, but has not yet made, a strategic business or operational decision that will foreseeably or inevitably lead to collective redundancies; or (ii) only when that decision has actually been made and he is then proposing consequential redundancies?” “42. … ‘proposes’ relates to a state of mind which is much more certain and further along the decision-making process than the verb ‘contemplate’ …”[41]For the reasons for set out by Elias P and Langstaff P, the EAT considered that it would be inappropriate to adopt any different position to that set out in MSF v Refuge and Vardy. For ease of reference, I have included the analysis of Langstaff P and Elias P in this decision. At paragraphs 15 and 16 of the decision in Kelly v The Hesley Group [2013] IRLR 516, Langstaff P stated:
“15. Ms Tether accepted the Tribunal had been bound to apply MSF but asked us to depart from it. Although we were taken to Middlesborough Council v TGWU [2002] IRLR 332 it was of no assistance: it did not consider the timing at which consultation should begin, and in any event was decided prior to MSF. Nor did we consider Securicor Omega Express Ltd v GMB [2004] IRLR 9 (the Appeal Tribunal presided over by Mr Justice Burton (President)) to be of assistance. The only other relevant domestic authority to which we were taken was that of UK Coal Mining v National Union of Mine workers (Northumberland Area) and Another [2008] ICR 163, again a decision of the Appeal Tribunal, presided over by Elias J as President. It had been argued before the Appeal Tribunal in that case that the obiter comments in Vardyno longer held good after amendments had been made to Section 188 in 1995 (they were made consequent upon a decision in The Commission of The European Communities v United Kingdom Case C-383/92 [1994] ICR 664, as a result of which Section 188 (1) was amended to include the obligation that consultation should be with a View to reaching agreement.) The judgment turned at paragraph 85 to deal with the meaning of “proposed” and that of “contemplated”
. Elias J said this:- “The issue, however, is whether it is possible to give effect to Section 188 so as to achieve [the result contended for by the Unions]. One way potentially would be to read “proposed” so that it means “contemplated”. That would bring domestic law wholly in line with the Directive. However… both the Divisional Court in Verdy and the Employment Appeal Tribunal in MSF v Refuge Assurance plc have expressed the view that, even given the generous scope for interpreting rules compatibly with European law, this would step beyond the legitimate parameters. We have some reservations about that conclusion, but in an area where that assessment is very much a matter of impression, we feel that it would be wrong for a court at this level to depart from those established decisions.” We take it that this Appeal Tribunal therefore had three reasons for reaffirming the MSF approach. First, it was a decision of the Employment Appeal Tribunal – and respect for the decisions of courts of coordinate jurisdiction is such that in general a court will not depart from such a decision (though it has the power to do so) unless satisfied that that decision is wrong. Second, the point was established (consistency and predictability in law are aspects of justice). Third, the assessment of whether a word could be interpreted with the width necessary to permit the argument was “a matter of impression”- i.e. a matter upon which views might legitimately differ, such that a decision in favour of either view could not be said to be wrong: it would therefore follow that consistency, certainty and predictability argued that the approach in the earlier case should be followed. 16. We, for our part are presented with the same argument again as put before Elias J. We reject it for the same reasons. This ground of appeal fails.” “The issue, however, is whether it is possible to give effect to Section 188 so as to achieve [the result contended for by the Unions]. One way potentially would be to read “proposed” so that it means “contemplated”. That would bring domestic law wholly in line with the Directive. However… both the Divisional Court in Verdy and the Employment Appeal Tribunal in MSF v Refuge Assurance plc have expressed the view that, even given the generous scope for interpreting rules compatibly with European law, this would step beyond the legitimate parameters. We have some reservations about that conclusion, but in an area where that assessment is very much a matter of impression, we feel that it would be wrong for a court at this level to depart from those established decisions.”[42]I proceed with the decision and analysis in this case on the basis that the words “proposing to dismiss” suggests something of a more developed plan than the word “contemplating” do, notwithstanding that that may have led to some disparity between the national legislation and original EU obligation.[43]However, before leaving the decision in Keeping Kids Company, I refer back to the words of Eady P at paragraph 27 of that decision regarding the requirements of the obligation to consult in good time. (Set out above at paragraph 27 of this Judgment). I also refer to TGWU v Nationwide [1978] IRLR 143, and the passages in that judgment that warn employers against leaving it unreasonably late before forming proposals so that consultation cannot be possible.[44]Administration is a significant process. It can facilitate assistance to companies in difficult times and also lead to an outcome where fewer jobs are lost. The Insolvency Act clearly sets out that the process of giving notice of an intention to appoint administrators, and that the consequences of such a notice being given creates a breathing space during which creditors cannot initiate action against a company.[45]I agree with the comments made by the Employment Judge that that breathing space is important. It can allow a company’s directors to formulate plans and proposals as to how to proceed. That moratorium arises not only at administration, when permission to issue proceedings against a company needs to be obtained from administrators, but also when notice of an intention to appoint administrators is served.[46]Once administrators are appointed and the company enters administration, the administrators take over responsibility for day-to-day management of the company. They, in many ways, become the decision-makers for the company. In making decisions, administrators are required to fulfil one of three statutory objectives set out in section 3(1)(b) of the Insolvency Act. “3. (1) The administrator of a company must perform his functions with the objective of— (a) rescuing the company as a going concern, or (b) achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being in administration), or (c) realising property in order to make a distribution to one or more secured or preferential creditors.” (a) rescuing the company as a going concern, or (b) achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being in administration), or (c) realising property in order to make a distribution to one or more secured or preferential creditors.”[47]The role of a Tribunal in determining a claim under section 189 of the 1992 Act is often to determine whether the trigger conditions for the collective consultation were met. This requires, in my judgment, an analysis of what was taking place within the organisation at different points in time. In some circumstances insolvency and administration may lead to decisions being taken very quickly for businesses. For example, in some situations a company may enter into administration during the course of a day. In some situations, a plan may already have been made for pre- pack administration, and the re-structure of the company. There may already have been a decision made that parts of it will be sold: the business may go into administration and the planned sale take place on the same day.[48]This can make it difficult for Tribunals to properly understand the factual circumstances which were at play during the relevant period of time. In many instances evidence will be imperfect. In addition, employers may, at the time in which difficult decisions are being made about the company and about its workforce, wish not to widely publicise internal pressures or difficulties to other competitors. The task of the Tribunal, is to carefully consider the available evidence before it.[49]When, then, can it be said that an employer is proposing to dismiss as redundant 20 or more employees within the requisite 90-day period? Established authority reveals that what is required in order to trigger the duty is something more definite than a mere possibility that that would occur, yet something less definite than a concluded certainty or decision. In UK Coalmining Limited Elias P, giving judgment at the EAT, set out the following passage at paragraph [26]:
“The question is, therefore, whether the limitation imposed by the word ‘proposed’, when contrasted with ‘contemplated’, prevents the consultation obligation extending to consultations over closures leading to redundancies. We do not think that it does. In our judgment, in a closure context where it is recognised that dismissals will inevitably, or almost inevitably, result from the closure, dismissals are proposed at the point where the closure is proposed. The difference between proposed and contemplated will still impact on the point at which the duty to consult arises – it will not be when the closure is mooted as a possibility but only when it is fixed is a clear, albeit provisional, intention.”
I note that the EAT there stated that in the context of the closure of a business, dismissals are proposed when closure is proposed, not mooted as a possibility, but where it is fixed as a clear, albeit provisional intention. A proposal, or ‘proposing to close’ is less than an actual decision to close.[50]In addition, the word “proposing” refers to current and ongoing consideration of future events albeit ones which are not certain. Particular care must, in my judgment, be taken when dismissals take place in separate periods of time. See again TGWU v Nationwide. The focus, when analysing whether the duty is triggered at a particular point in time, is on whether it is being proposed that certain events should occur in the future, but over a relatively lengthy period of time in the future. Finally, all of this must be considered within the context of what the legislation seeks to achieve: that employers consult in good time. I refer back to the words of Eady P set out at paragraph 27 above: “the employer does need to project forward, to assess when consultation must start to ensure it is “in good time” for meaningful consultations to take place,” which may, inevitably, require it to do so when not all information is available and where there are uncertainties or contingencies still in play which will impact the ultimate the decisions regarding redundancies.[51]A relatively clear example of that is apparent from the facts of E Ivor Hughes Educational Foundation Trust v Morris [2015] IRLR 696 where these principles were applied in the context of the possible closure of a school. The EAT held that a duty arose when a provisional decision to close the private school had been reached. In that case the employing school had experienced a decline in the number of pupils. At the end of February in one year, management made a decision that the school would have to close at the end of that academic year if numbers did not increase. Once the numbers were actually known, approximately two months later at the end of April, a final decision was taken to close. No consultation took place in relation to the resulting redundancies.[52]A Tribunal and EAT held that the duty to consult under section 188 had arisen. The EAT noted that there was an ongoing debate as to whether consultation obligations arose when the employer was proposing, but had not made a strategic business or operational decision that would foreseeably or inevitably lead to collective redundancies, or, whether it would be that it was only when that decision had actually been made and that he was proposing redundancies that the duty arose. The decision was that whichever test applied, the duty to consult had arisen on the basis that there was a fixed, clear albeit provisional intention to close the school which gave rise to the obligation to consult. Conclusions.[53]I allow the appeal. I have been acutely mindful of the role of this appellate Tribunal, having regard in particular to the decision of the Court of Appeal in DPP v Greenberg [2021] EWCA Civ 672. It is for the Tribunal to make findings of fact. Further, where a Tribunal accurately sets out the law and relevant legal principles, and sets out its findings of fact, it is incumbent on the appellate court to operate on the basis that, broadly, it is likely for the Tribunal to have known its role and the function that it was to have carried out.[54]Whilst mindful of this Tribunal’s role, I allow all three grounds which I take together.[55]The Judge in this case concluded at paragraph 24 that there was a clear intention to sell the First Respondent as a going concern and, further, that it did not matter whether there was a low, medium or high prospect of a sale as a going concern taking place. I consider that in reaching that conclusion the Judge was in error. It did matter. By excluding that matter from consideration the Judge excluded consideration of whether there was, for example, an intent that the business would close unless a purchaser could be secured for it/ unless it could be sold as a going concern.[56]The Judge refers at repeated times in the judgment to “a” or “the” proposal to dismiss. See for example paragraph 25 or “the proposal” to dismiss, paragraph 17. That indicates that he was not looking at what was being proposed but rather on whether or not there was a fixed certain proposal at a point in time. In addition, his citation of the relevant legislation was not complete. Further, at paragraph 26, the Judge’s focus appeared to be whether there was a fixed clear intention which amounted to a proposal to make collective redundancies. That, in my judgment, is a misstatement of the relevant legal principles.[57]The question which the Tribunal had to consider and to answer was whether, during the relevant time, the employer was proposing to dismiss within a period of 90 days 20 or more employees.[58]Secondly, whilst I have sympathy with the Tribunal as to the quality of evidence that was available before the Judge, there was clear evidence in the report from the administrators. That clearly set out that, although, significantly earlier, when they were first introduced to the business, there had been an intention and hope to try and sell the company as a going concern, that possibility did not materialise. Steps had then been taken to protect the business through the introduction of the moratorium by the serving of two notices of intention to appoint administrators. There was no evidence however that any offers were ever made to purchase the business. The only evidence from the directors was evidence from the earlier stages, in April of 2023, when it appeared that optimism was relatively high.[59]The report from the administrators revealed that, as of their appointment, the statutory objective of selling the business as a going concern could not realistically be met and that therefore the objective of winding up was the objective which they then followed, taking steps to facilitate and maximise compensation for creditors.[60]In my judgment, the evidence before the Tribunal in that document was that, as of 2 May 2023 when the administrators were appointed, at the very least, that closure was envisaged in the event that the one remaining intereted party did not pursue matters any further. That was the day on which the first of the first employees were dismissed, rapidly followed by most other employees within the business on 5 May 2025.[61]In my judgment the Employment Judge erred in his statement of the relevant legal principles and in his application of those to the facts that were before him. I also consider that the judgment can properly be described as perverse, given the evidence that was before the Tribunal and that the fact that the evidence from the administrators was not that they were pursuing the statutory objective of selling the business as a going concern, but that on their appointment rather they were required to follow the objective of maximising recovery for creditors.[62]For all those reasons I allow the appeal.[63]In terms of disposal, my initial view is that this may be a case where remittal to the Tribunal would serve very little purpose, if, in truth, the only evidence is that which is before the EAT today. Having heard submissions my view remained the same. My decision on disposal is as follows.[64]The decision of whether or not an employer was proposing to dismiss a number of employees is inherently fact sensitive in my judgment. In many cases, it would not be appropriate for the EAT to consider substituting its own view. However, in this case the appeal is not opposed by the administrators.[65]Furthermore, the evidence before the EAT is that there is only one likely outcome, namely that as of the date of the appointment of the administrators it appears very likely that the employer were proposing to dismiss as redundant 20 or more employees: at that stage, unless the business could be sold to one remaining prospective purchaser, or part of it could be sold to the prospective purchaser, the business would be wound up and close.[66]I consider that in those circumstances it is likely that there was a fixed, clear, albeit provisional intention to close that business, which would have given rise to an obligation to consult under section 188.[67]Therefore, I substitute the EAT’s decision that the three Claimants who are appellants in this matter are entitled to a protective award. Subject to anything that the representative for the Claimants may say I consider that there is no good reason why the protected period for these Claimants should not be the same as it was for the other successful Claimants, namely the period of 90 days.[68]I substitute the decision that the claims of Mr Ellard, Mr Warren and Mr Hulse succeed and that they are entitled to an award. Mr Ellard, Mr Warren and Mr Hulse’s claim pursuant to section 189 of the Trade Union and Labour Relations (Consolidation) Act 1992 is well founded. The Tribunal makes a protective award for a protected period of 90 days commencing on 2 May of 2023.