In Ellard and others v Alliance Transport Technologies Ltd (in Administration) [2025] EAT 169, the Employment Appeal Tribunal (EAT) clarified when the duty to collectively consult arises in an insolvency context.
The employer entered administration on 2 May 2023 and dismissed 15 employees that day. Further dismissals followed three days later, after the remaining prospect of a sale fell away. The employment tribunal rejected protective award claims brought by those dismissed on the first day.
The EAT held that this was wrong. The issue was not whether there was a separate proposal to dismiss 20 or more employees on 2 May, but whether the employer was proposing to dismiss 20 or more employees within 90 days. A clear, provisional intention to close the business if no sale was achieved was sufficient to trigger the duty.
The EAT therefore substituted its own decision, holding that the three employees dismissed on the first day of administration were entitled to protective awards, calculated by reference to a 90-day protected period from the date of dismissal.
