By Jo Seery, Professional Support Lawyer
William Webb, Employment Rights Solicitor
In this week’s instalment of our series on the Employment Rights Act 2025 (ERA 2025), we discuss the changes introduced to the Protective Award which can be awarded when an employer has failed to consult the appropriate representatives in a collective redundancy situation and what this means for unions and their members.
In Brief
The ERA 2025 will double the maximum protective award which can be ordered by a tribunal where their employer fails to comply with the statutory duty to consult prior to imposing redundancies, with the penalty increasing from 90 to 180 days’ pay. The ERA will also extend the duty to consult so that it applies not only where 20+ redundancies are planned at one establishment, but also where an employer intends to dismiss as redundant at least a threshold number of employees across the employer's business. This ought to mean that more employees facing redundancy will have the right to be consulted before dismissal. It remains to be seen exactly how the relevant thresholds will be defined.
The Current Legislative Framework
At present, s 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) imposes a statutory duty to consult where an employer proposes to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less. In that case employers are required to consult with the appropriate representatives of employees who may be affected by the proposed dismissals or measures taken in connection with those dismissals. Where an independent trade union is recognised by the employer, the appropriate representatives will be representatives of the trade union. Where no independent trade union is recognised, the appropriate representatives will be elected employee representatives.
Employers are required to consult about ways of avoiding the dismissals, reducing the number of employees to be dismissed and mitigating the consequences of the dismissals, and are also under a duty to provide certain prescribed information. Consultation must begin at least 30 days before the first dismissals take effect, or 45 days where the employer proposes to make 100 employees or more redundant .
If an employer fails to comply with its consultation duty, the Employment Tribunal can make a protective award to affected employees, ordering the employer to pay them remuneration for the “protected period” (s 189 TULRCA). The current maximum protected period is 90 days.
Changes under ERA 2025
Section 29 ERA 2025 amends s 188 TULRCA which will introduce a requirement for employers to consult where they propose to dismiss within a period of 90 days or less “at least the threshold number of employees” (across more than one establishment), and makes further provision for the Secretary of State to prescribe this threshold through secondary legislation. The “threshold number of employees” can be a prescribed number (but cannot be less than 20) or can be set by reference to a percentage of the workforce. The Secretary of State is also empowered in setting the threshold to exclude employees of specified descriptions from being taken into account when calculating whether thresholds are satisfied.
The effect of these changes should widen the scope of the duty to consult so that it applies across the whole of the workforce
Section 30 ERA 2025 doubles the protected period under s 189 TULRCA from 90 to 180, where the employer fails to collectively consult meaning that an employment tribunal can make a protective award of up to 180 days’ pay. This will increase the costs for an employer if they fail to meet the duty to collectively consult
While the increase to the protective award is due to come into force on 6 April 2026. The reforms relating to consultation trigger thresholds are not expected to be implemented until 2027..
A step in the right direction
The expansion of consultation rights to the whole of the workforce is a welcome change.
The increase to the protective award, should hopefully deter most employers from evading their collective consultation duties. Thompsons had campaigned for the introduction of interim relief if an employer did not comply with their consultation requirements, such that they would be prevented from terminating contracts until they complied with their obligations. However, this suggestion was not accepted in the ERA 2025 as passed.
