Collective Redundancy- Increase to Protective Award

The amount of the maximum protective award that can be made will be doubled. This means that, from 6 April 2026, employers who fail to collectively consult where there is a proposal to dismiss 20 or more employees at one establishment within a period of 90 days will be liable to pay 180 days’ pay for each affected employee. The increase in the maximum award from 90 days’ pay for each affected employee is designed to ensure that it is not commercially viable for an employer to ignore its obligations to enter into meaningful consultation with the appropriate representatives to consider alternatives to redundancies.   

 

Further Reform to Collective Redundancy Law 

The obligation on an employer to collectively consult in redundancy situations will be amended so that an employer must collectively consult with appropriate representatives (which will be the union where the union is recognised) where it proposes to dismiss as redundant within a period of 90 days: 

  • 20 or more employees at one establishment; or 
  • At least the “threshold number of employees”. 

It had originally been proposed to remove entirely the requirement that the redundancies had to be “at one establishment”, which would have meant that the duty to consult would be triggered if there were 20 or more redundancies across any organisation as a whole. However, this proposal has been abandoned in response to intense lobbying from various business groups. This approach would have prevented a situation as happened in USDAW v WW Realisation 1 Limited & Ethel Austin (C/80-14), 30 April 2015, where the employer was not obliged to collectively consult about the dismissal of employees in many of the individual (Woolworths) shops which were being closed. This was because there were fewer than 20 employees employed at each shop, and this exemption applied notwithstanding the fact that there was one proposal to dismiss all employees across the entire organisation. 

The Government launched a consultation on a new organisation-wide threshold on 26 February 2026. Views are sought on the method used to set the new threshold and what level it should be set at, with the government proposing either a fixed number or a percentage. The government’s preferred approach is to set the level at a fixed number of redundancies across the whole of the employer’s business. The consultation sets out a table showing the number and proportion of employers who could be in scope if the threshold was set at varying levels between 250 and 1,000, and an options assessment sets out an analysis of the impact of the government’s proposals. The consultation closes on 21 May 2026.

 

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