Collective consultation: when is a “proposal” made?
We are continuing to see increased demand from clients for support on redundancy exercises and collective consultation processes. With ongoing economic uncertainty and rising unemployment, that trend is unlikely to abate in the near term. The stakes are also higher than ever in light of changes implemented by the Employment Rights Act. Where an employer is proposing to make 20 or more redundancies at one establishment within a 90‑day period, it must collectively consult with employee representatives. From April 2026 the potential liability for getting this wrong is up to 180 days’ uncapped pay per affected employee (with failure to notify the Secretary of State carrying criminal risk). Getting the trigger point for consultation right therefore remains critical. A recent case serves as a salient reminder that a “proposal” arises before redundancies become inevitable.
In Ellard & ors v Alliance Transport Technologies Ltd (in administration) [2025] EAT 169, the employer, Alliance Transport Technologies (“ATT”) entered administration on 2 May 2023. The administrators made 15 employees redundant on that date, with most of the remaining workforce dismissed on 5 May once an attempt to complete a sale as a going concern to a single interested party failed. The question before first the Tribunal and then the EAT was whether a duty to consult arose in respect of the earlier dismissals – when business closure was already under consideration, but there were ongoing discussions with a buyer for the sale of the business as a going concern.
The EAT found that it did. It emphasised that the statutory question is whether the employer was “proposing to dismiss” 20 or more employees within a 90‑day period. That requires a forward-looking assessment of the relevant 90-day period, taking into account future events, even if uncertain. The duty is therefore triggered where there is a clear, albeit provisional, intention to effect redundancies within the relevant period, even if alternatives (such as a sale) are still being explored. In business closure cases, established case law confirms there is only a proposal when closure moves beyond being merely mooted to becoming a fixed (albeit provisional) intention. In this case, it was highly relevant that, by 2 May, the evidence showed that a going-concern sale was not realistically achievable (or unlikely) and closure was the likely outcome if the remaining interested party pulled out; that was enough to amount to “proposing” collective redundancies at that point.
Consistent with recent case law, Ellard confirms that the trigger for collective consultation obligations is inherently forward-looking, the decision confirms that Tribunals will take a broad, practical view of what amounts to a “proposal”, something more than a mere possibility but short of a final decision. In practice, employers cannot safely defer consultation until proposals crystallise and redundancy remains the only option on the table. Where the direction of travel is sufficiently established (even conditionally), the duty is likely already engaged. The case is also a reminder that attempts to segment dismissals into stages, or to focus narrowly on what is proposed “on the day”, are unlikely to withstand scrutiny. More broadly, it underlines the need to document contemporaneous thinking carefully and to keep the consultation trigger under continuous review, particularly in fast-moving situations such as restructurings or insolvency processes.
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