Collective Redundancy Obligations

The Trade Union and Labour Relations (Consolidation) Act 1992 currently requires collective consultation where an employer proposes 20 or more redundancies at one establishment within 90 days. Consultation and notification to the Secretary of State must begin at least 30 days before the first dismissal where 20–99 redundancies are proposed, or 45 days beforehand where 100 or more are proposed.

Organisation-Wide Threshold

Section 29 of the Employment Rights Act 2025 will introduce an additional organisation-wide trigger. Collective consultation will be required where, within 90 days, an employer proposes:

  • 20 or more redundancies at one establishment; or
  • at least a prescribed number of redundancies across the organisation.

The organisation-wide threshold will be set by regulations and cannot be below 20. The government consulted on possible methods, including fixed, percentage-based and tiered thresholds. Its preferred option is a single fixed threshold of 250, 500, 750 or 1,000 redundancies. Alternatively, a tiered system could require consultation at:

  • 250 redundancies for organisations with up to 2,499 employees;
  • 500 for those with 2,500–9,999 employees; and
  • 750 for those with 10,000 or more.

Percentage-based thresholds are not preferred because they could be difficult to calculate and make breaches harder for employees and unions to identify. The new threshold is expected to commence in 2027, subject to regulations and parliamentary approval.

Where proposed redundancies affect several establishments, employers must give representatives written information about the total number and affected establishments. Employers may conduct one organisation-wide consultation or separate consultations with different representative groups. They will not be required to consult all representatives together or seek identical agreements with each group. Secretary of State notification and TUPE-related consultation triggers will be aligned with the new framework

Increased Protective Award

For dismissals taking effect on or after 6 April 2026, the maximum protective award for failure to comply with collective consultation obligations has increased from 90 to 180 days’ pay. This significantly increases the financial risk of non-compliance. This is the only current change to collective consultation obligations until the legislative change set out above is implemented.

Practical Impact of the Future Legislative Change

Single-site employers will generally remain governed by the existing 20-redundancy threshold. Multi-site employers (and unions who have presence there) will need to monitor proposed redundancies centrally across a rolling 90-day period rather than simply assess each establishment separately to check if the duty to collectively consult is engaged. Non-unionised employers may well benefit from establishing a relationship with an independent trade union to ensure revised collective consultation obligations are met.

Government analysis suggests the reforms may prevent or delay redundancies and increase redundancy payments. Estimated annual business costs range from £60.9 million, using a threshold of 1,000, to £131.9 million, using 250. An additional 279–344 tribunal complaints annually are anticipated.

The government also intends to publish compliance guidance and consult on a new Code of Practice on collective redundancy obligations.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

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