Collective Redundancy Consultation

The obligation to collectively consult will depend on the number of people impacted across the business, rather than in one workplace

Labour plan to change the law on collective redundancy consultation so that whether the obligation to collectively consult has been triggered will depend on the number of people impacted across the business, rather than in one workplace.

Current Position

A special information and consultation regime applies where there are 20 or more affected employees who are proposed to be dismissed for a ‘non-fault’ reason within a particular time frame. There’s no time limit for how long the period of consultation should be, but the minimum is:

	Number of Redundancies	Minimum Consultation Period
	19 or less	there are no rules about timescales for the consultation
	20 to 99	the consultation must start at least 30 days before any dismissals take effect
	100 or more	the consultation must start at least 45 days before any dismissals take effect

Also, if the employer proposes to make redundancies affecting 20 or more employees within a particular time frame, it must notify BIS.

Proposed Changes

Meaning of Establishment

In April 2015 the European Court of Justice reached its decision in the “Woolworths case” concerning the duty to consult collectively under the Collective Redundancies Directive. Consequently, the meaning of “establishment” for the purposes of determining when that duty is triggered changed to the establishment to which the workers are assigned to carry out their duties. So, in the Woolworths case that meant each individual shop, rather than the business as a whole.

This plan would reverse the Woolworths loophole; meaning employers with more than one site will need to keep a close eye on the number of redundancies they plan across the whole business to know when collective consultation obligations have been triggered. Collective redundancy consultation will be required more often than is currently the case.

Collective Consultation

Under the current law, employers proposing 20+ redundancies “at one establishment” within a period of 90 days must go through a process of collective consultation before making any redundancies. In a major change, collective consultation will now be required if there are 20 or more redundancies at one establishment OR a different threshold is met, with details of that threshold to be set out in further regulations. The alternative threshold is likely to be based on redundancies across the employing entity as a whole and could be a percentage, or a higher number (e.g. the lower of 10% or 100 employees across the business as a whole).

The Bill has also been amended to state that, in carrying out collective consultation, the employer does not need to consult all employee representatives together, or try to reach the same agreement with all of the representatives. This addresses a concern raised by many employers that the Bill would require representatives to be brought together and consulted as a central group over batches of unconnected local redundancies.

New Proposals (March 2025)

Threshold For Triggering Consultation Requirements

A major new revision introduces a potential alternative threshold system for triggering consultation requirements, and commentary suggests that this would mean employers would need to consult when either:

• The existing requirement when there are 20 or more redundancies occurring at a single establishment, or
• A certain percentage or number of the total workforce is affected across the business. The exact measure will be set in future regulations, but government commentary suggests it may be a typical case of “X% or X employees, whichever is lower”.

Flexible Consultation Process

Employers will not be required to consult all employee representatives together or seek the same agreement across all representatives at different sites. This change responds to employer concerns that the ERB could have forced a single consultation process for separate, unrelated redundancy exercises at different sites if the threshold was met.

Interim Relief

The government has dropped plans to make interim relief available as a remedy to employees dismissed in breach of collective consultation requirements but says it will consult on other ways to strengthen the regime (trade unions will be calling for longer consultation periods, so watch this space).

Increased Financial Penalties For NonCompliance

The maximum protective award for failure to collectively consult on redundancies will increase from 90 to 180 days per employee. This will increase the risks associated with not handling collective redundancy processes correctly. Tribunals will, however, retain discretion to reduce payments based on the severity of the breach and resisted calls to remove caps on protective awards.

Employment Rights Bill Delivery Roadmap
As the Employment Rights Bill progressed through the House of Commons, we saw changes to the proposed threshold for triggering collective consultation. The current version of the Bill now provides that the duty will arise where an employer proposes to dismiss as redundant, within a period of 90 days or less, either 20 or more employees at one establishment (the current position), or at least the “threshold number of employees”. The roadmap explains that this change is not expected until 2027, with a consultation planned for this winter or early 2026 to work through the remaining details. For example, we don’t yet know what the “threshold number of employees” will be. The increase to the protective award for failures in collective consultation – from 90 days’ pay to 180 days’ pay – is set to take effect sooner, in April 2026.

Top Tips

If you have more than one site and are considering redundancies keep a close eye on the number of employees who will be involved to ensure you do not exceed the 20 in 90 day period in the short-term.

Employee Handbook Compliance Package

Get the Latest Legislation News and My Top Tips delivered straight to your inbox

Have a question? Let's have a chat and a coffee!

If you found this helpful and you would like to learn more about how I work with owners of small business who want to improve their HR management, please book some time in my diary.

Tap into and share the Kea world!

Don't forget to add Kea to your social networks and when you read an article that you like share it with your network!