Collective redundancy consultation
Ellard & Ors v Alliance Transport Technologies Ltd [2025] EAT 169
The Claimants were employed by a manufacturing business employing approximately 51 staff. The company entered administration on 2 May 2023. On that same day, 15 employees were dismissed as redundant. A further round of dismissals followed on 5 May 2023, after a potential buyer withdrew, resulting in most of the remaining workforce being dismissed.
The Claimants, who were among those dismissed on 2 May, brought claims for a protective award under section 189 of the Trade Union and Labour Relations (Consolidation) Act 1992 on the basis that the employer had failed to comply with its collective consultation obligations.
The Employment Tribunal awarded a protective award to those dismissed on 5 May but refused relief to the Claimants dismissed on 2 May. It reasoned that, at the point of the first dismissals, only 15 redundancies were proposed, meaning the statutory threshold of 20 dismissals had not been met.
The Claimants appealed.
The Employment Appeal Tribunal allowed the appeal and substituted a finding that the Claimants were entitled to a protective award for the maximum period of 90 days.
The EAT held that the tribunal had applied the wrong legal test. The correct question was whether, at the relevant time, the employer was proposing to dismiss 20 or more employees within any 90-day period. That assessment is fact sensitive and requires consideration of the employer’s intentions in the round, rather than a narrow focus on the number of dismissals taking place on a particular day.
The EAT confirmed that a “proposal” to dismiss does not require a final or irrevocable decision. It may exist even where alternative options remain under consideration. What matters is whether, on the evidence, there is a sufficiently formed intention that redundancies of the relevant scale are contemplated.
On the facts, the administrators’ own material showed that, by 2 May, a going-concern sale was no longer realistically achievable and that winding up the business was the operative objective. In those circumstances, there was at least a settled, albeit provisional, intention to dismiss the workforce. That was sufficient to trigger the collective consultation duty.
Employer takeaways
This decision reinforces that collective consultation obligations arise earlier than many employers assume. The statutory trigger is not the point at which dismissals are confirmed, but the point at which the employer is proposing redundancies at the relevant scale within a 90-day window.
In practice, this requires employers, and particularly administrators, to assess intention realistically. The existence of potential alternatives, such as a possible sale, does not delay the duty if those alternatives are no longer viable on the evidence. Tribunals will look closely at internal documents and decision-making to determine what was genuinely contemplated at the time.
The case also highlights the risk of analysing redundancies in artificial stages. Breaking dismissals into separate tranches will not avoid collective consultation obligations if, viewed objectively, they form part of a single redundancy exercise.
From a risk perspective, protective awards remain a significant exposure, particularly in insolvency scenarios where consultation is often compressed. A failure to recognise when the duty is triggered can result in liability for up to 90 days’ pay per affected employee.
Employers should ensure that restructuring and insolvency planning includes early legal assessment of collective consultation thresholds, supported by clear documentation of decision-making and the viability of alternative options.
Wage Claim
McMahon v AXA ICAS Ltd (Court of Session, Inner House)
Ms McMahon was employed by AXA ICAS Ltd and had a contractual entitlement to permanent health insurance (PHI) benefits after 26 weeks of absence due to ill health. Under the contract, those benefits were to be provided through an insurance policy. No policy was put in place.
Ms McMahon became eligible for PHI payments in May 2011. Payments were not made. In September 2013, AXA dismissed her on grounds of incapacity.
She brought a claim for unlawful deductions from wages under section 13 of the Employment Rights Act 1996, initially seeking recovery of unpaid PHI benefits accrued during her employment. She later sought to amend her claim to include PHI payments said to be due after her dismissal.
The Employment Tribunal refused that amendment on the basis that, once employment had ended, there could be no continuing claim for wages. The Employment Appeal Tribunal upheld that approach.
The Inner House of the Court of Session allowed Ms McMahon’s appeal. It held that the tribunal and EAT had taken an unduly narrow view of the contractual obligation.
First, the court found that the obligation to provide PHI benefits was collateral to the core employment relationship. Unlike ordinary wages, entitlement to PHI does not depend on the provision of work. The contractual obligation can therefore continue even after termination of employment, provided the conditions for entitlement remain satisfied.
Secondly, the court held that, even if that analysis were wrong, the dismissal itself could not defeat the entitlement. Where a contract contains an implied term preventing dismissal for the purpose of avoiding PHI liability, a dismissal in breach of that term has no effect on the employee’s entitlement. Applying the reasoning in Aspden v Webbs Poultry, the attempt to terminate employment to avoid PHI obligations did not extinguish the underlying contractual right.
On either basis, the court concluded that PHI payments could fall within the extended definition of “wages” under section 27 of the Employment Rights Act 1996. If the employee remained eligible under the scheme, the employer’s liability to make payments continued beyond termination.
The case was remitted to determine the extent of Ms McMahon’s entitlement.
Employer takeaways
This decision is a clear warning that PHI obligations do not necessarily end when employment ends. Where a contractual entitlement exists, particularly one designed to operate during long-term incapacity, the obligation may continue independently of the employment relationship itself.
The distinction between core contractual obligations and collateral benefits is critical. PHI schemes are often structured on the assumption that termination ends liability. This case demonstrates that such an assumption may not hold, especially where entitlement does not depend on active service.
Employers should also approach dismissal decisions with caution where PHI entitlement is engaged. If termination is linked, even indirectly, to avoiding ongoing benefit payments, there is a risk that the dismissal will not prevent the obligation from continuing. The Aspden principle remains a live and relevant constraint.
From a compliance perspective, failure to implement contractual benefit structures, such as putting insurance in place, significantly increases exposure. In those circumstances, the employer may remain directly liable for payments that would otherwise have been covered by insurance.
Finally, the classification of PHI payments as “wages” for the purposes of the Employment Rights Act 1996 has procedural implications. It allows claims to be brought in the employment tribunal rather than through civil courts, increasing accessibility and extending the practical risk profile for employers managing long-term absence cases.
Judicial conduct & apparent bias
Matovu v The Chambers of Mr Martin Porter KC (EAT 2026)
Mr Matovu, a barrister and former member of 2 Temple Gardens, brought claims arising from his expulsion from chambers in 2019, including allegations of victimisation linked to prior complaints of race discrimination. As part of those proceedings, he made applications at a preliminary hearing to amend his particulars of claim to include additional protected acts and to obtain further information relating to an allegation of bad faith advanced by the Respondents.
The Respondents did not oppose the proposed amendments. Despite this, the Employment Judge refused the amendment application and also refused the request for further information. In doing so, the Judge relied on concerns that the amendments would expand the scope of the case and require additional evidential inquiry, points that had not been advanced by the Respondents. The Judge also imposed conditions on an amendment that had not been sought by either party and subjected the Claimant to critical questioning on matters that had not been put in issue.
Mr Matovu appealed on grounds including perversity and apparent bias. The Employment Appeal Tribunal allowed the appeal.
On perversity, the EAT held that the Judge had reached conclusions on bases that were neither argued by the Respondents nor consistent with his own observations during the hearing. The refusal of the amendment and the request for further information could not be sustained on the reasoning given.
On apparent bias, the EAT applied the established test of whether a fair-minded and informed observer would conclude that there was a real possibility of bias. While no single aspect of the Judge’s conduct was determinative, the cumulative effect was decisive. The combination of extensive intervention in an unopposed application, criticism of the Claimant on points not advanced by the Respondents and decisions grounded in reasoning not argued by either party created that real possibility.
The appeal was allowed on both grounds, and the Employment Judge was barred from further involvement in the proceedings.
Employer takeaways
This decision sits outside the usual employer conduct framework but remains relevant for organisations involved in tribunal litigation. It highlights how closely appellate courts will scrutinise the fairness of case management decisions, particularly where those decisions affect the ability of a party to advance its case.
For employers, the practical point is that tribunal proceedings are not insulated from challenge at interlocutory stage. Where a judge introduces reasoning that has not been advanced by the parties, or appears to take an active role in shaping the issues beyond what is required, there may be grounds to challenge the decision.
The case also reinforces the importance of procedural balance. Even robust case management should remain anchored in the arguments put forward by the parties. Where a decision-maker appears to go beyond that, especially in a way that disadvantages one side, the risk shifts from ordinary case management into questions of fairness and potential bias.
From a litigation strategy perspective, employers should remain alert to procedural irregularities during hearings. Where concerns arise, these should be identified and recorded promptly. While appeals on bias are fact-sensitive and not lightly made, this case shows that cumulative conduct, rather than any single misstep, can be sufficient to meet the threshold.
Finally, the decision is a reminder that tribunal process is itself subject to legal standards. Outcomes are not assessed solely by reference to substantive claims, but also by whether the route taken to reach them is fair and impartial.
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