Provisional, Not Hypothetical: When Administration Itself Triggers Collective Consultation

When administrators arrive on site at a struggling manufacturer, the first job is usually triage. Three workers at Alliance Transport Technologies turned up on 2 May 2023 to a shop floor that had functioned the previous evening, and were redundant by close of play. The question that reached the EAT was whether, at any moment that morning, anyone had been "proposing to dismiss" them.

The tribunal at first instance said no. The reasoning ran as follows: at 9 a.m. on 2 May, only 15 dismissals were on the cards, the administrators' "clear intention" was to sell the business as a going concern, and whether the prospects of a sale were "high, medium or low" did not matter. Three claimants who lost their jobs that day went home without a protective award. The 38 colleagues dismissed three days later, when the last interested purchaser walked, did not.

In Ellard v Alliance Transport Technologies Ltd (in administration) [2025] EAT 169, Judge Tucker held that the tribunal had asked the wrong question.

The verb tense matters

Section 188 TULR(C)A 1992 imposes a duty when an employer is "proposing to dismiss as redundant 20 or more employees" within a period of 90 days or less. The verb is continuous. It does not require a discrete dismissal proposal landing on a particular day; it requires the employer's current and ongoing consideration of whether 20 or more dismissals lie in the foreseeable 90-day future. The tribunal had collapsed that into a snapshot, asking whether an event called "the proposal" existed as at the relevant date, and so missed what the statute is actually doing.

The EAT's reformulation is doctrinally orthodox but practically consequential. Closure mooted as a possibility does not engage the duty. Closure as a fixed, clear, albeit provisional intention does. In Alliance Transport's case, the administrators' own report showed no formal offers had been received for the business as a going concern, and a sale was "not realistically achievable". Unless one specific prospective purchaser came good, the business would be wound up. That is not a possibility. It is a provisional intention.

Why "provisional" is not a fudge

There is a real risk that the Ellard test reads, in practice, as an invitation to back-date the trigger to the moment of every administrator's appointment. The line between possibility and provisional intention is genuinely fact-sensitive, and tribunals are being asked to do non-trivial historical reconstruction. But the EAT's standard has anchors.

The first is the line of authority running through Junk v Kühnel (Case C-188/03) [2005] IRLR 310 and UK Coal Mining Ltd v National Union of Mineworkers (Northumberland Area) [2008] ICR 163: consultation must precede the moment minds become fixed on dismissal as the means of dealing with a business problem, including a closure decision when closure and dismissal are inextricably linked. The second is Micro Focus Ltd v Mildenhall [2025] EAT 188, which confirms the assessment of dismissals "proposed" within the 90-day window is forward-looking and entity-specific. Ellard applies the same logic to administration: the question is whether, looking forward from the date in issue, the employer was contemplating 20-plus redundancies in the next 90 days as something more than hypothetical.

That framework matters in administrations because the day-one cull is a routine feature of insolvency practice. Administrators frequently dismiss a tranche of employees immediately to preserve cash for a marketing exercise, then dismiss the balance when the marketing fails. The tribunal's snapshot approach effectively rewarded this two-stage manoeuvre: claims arose only from the second tranche, when "the proposal" became visible. Ellard removes that benefit.

What the case is worth now

The protective award in Ellard was 90 days' pay per claimant, the statutory maximum at the time of dismissal in May 2023. From 6 April 2026, the maximum doubles to 180 days under section 30 of the Employment Rights Act 2025. Identical facts arising today therefore double the per-claimant exposure. A small day-one tranche in an administration of this size produces a five-figure award per worker; in a larger insolvency, Ellard combined with the new ceiling can quickly reach seven-figure aggregate exposure.

Whether that exposure has anywhere to land in practice is the harder question. Protective award claims against insolvent companies typically fall on the National Insurance Fund up to the statutory cap (currently eight weeks' pay) and on the company's general estate beyond that. In most administrations the latter delivers little. But where there is a TUPE-style transfer or an associated employer prepared to take responsibility, the doubled award becomes a real number on a real balance sheet.

Practical takeaways

1. Treat the date of administration as a working hypothesis for the s.188 trigger. It will not always be the right date, but it is now plainly capable of being so. Tribunals will look at the administrators' contemporaneous documents (internal sale prospects, marketing reports, communications with prospective purchasers) to test that hypothesis.
2. Preserve, and disclose, the prospects-of-sale evidence. Ellard is explicit that the likelihood of a sale is relevant, not irrelevant, to whether the duty has been engaged. Administrators will need to show on contemporaneous documents that closure was at most a possibility on the relevant date.
3. Do not assume day-one dismissals are outside the s.188 net. They might be, but only if the prospects of avoiding closure looked materially better at that moment than the prospect that crystallised in the days following. Administrators routinely produce reports that make exactly the opposite case.
4. Recalibrate exposure for dismissals on or after 6 April 2026. The doubling under s.30 ERA 2025 applies to dismissals from that date. Any insolvency advice circulated before April should be revisited if the facts mean dismissals will occur after.

For years, administrators have treated the day-one cull as a free move: outside the proposal, outside the duty. Ellard confirms what the verb tense already said: the duty does not wait for the paperwork.

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