Guide
Collective redundancy: updated consultation rules
Updated guidance on collective redundancy consultation following ERA 2025 changes, including doubled protective award and new organisation-wide threshold.
The Employment Rights Act 2025 makes significant changes to collective redundancy consultation rules. This guide explains what has changed and what employers must do.
Changes summary
- Protective award (from April 2026)
- Maximum increased from 90 to 180 days' pay
- Organisation-wide threshold (from 2027)
- New threshold in addition to 20+ at one establishment
- Threshold level
- To be set in regulations (expected 20-100)
Protective award increase
From 6 April 2026, the maximum protective award for failure to collectively consult doubles from 90 to 180 days' gross pay per affected employee.
- Current maximum (until April 2026)
- 90 days' gross pay per employee
- New maximum (from April 2026)
- 180 days' gross pay per employee
- Example (100 employees, average £600/week)
- Potential award increases from £770,000 to £1.54 million
- Awarded for
- Failure to collectively consult or notify the Secretary of State
Doubled financial risk: The potential cost of getting collective redundancy wrong has doubled. Ensure you understand when collective consultation is required and follow the proper process.
Current consultation thresholds
Collective consultation is currently required when proposing to dismiss 20 or more employees as redundant at one establishment within any 90-day period:
New organisation-wide threshold (from 2027)
The ERA 2025 introduces an additional threshold based on total redundancies across the organisation, not just at one establishment.
- New threshold
- Organisation-wide (in addition to establishment test)
- Level
- To be set in regulations (expected 20-100)
- Effective date
- 2027
- Consultation expected
- Late 2025/early 2026
Monitor for regulations: The exact organisation-wide threshold will be set in secondary legislation following consultation. Monitor gov.uk for final regulations.
Practical implications
Multi-site employers
The organisation-wide threshold will affect employers who make redundancies across multiple sites. Even if each site has fewer than 20 redundancies, collective consultation may be required if the total exceeds the new threshold.
Staged redundancies
Employers cannot avoid collective consultation by splitting redundancies across different time periods or locations. The 90-day period is rolling, and the organisation-wide threshold applies across all locations.
Consultation requirements
When collective consultation is triggered, employers must:
- Consult with representatives: Trade union representatives or elected employee representatives
- Consult in good time: Begin consultation before decisions are made
- Cover required topics: Ways to avoid dismissals, reduce numbers, and mitigate consequences
- Provide information: Reasons, numbers, categories, proposed method, and timing
- Notify Secretary of State: File HR1 form within required timeframe
Compliance checklist
- Understand when collective consultation is required
- Track redundancy numbers across all establishments
- Monitor the 90-day rolling period
- Have a process for identifying and electing employee representatives
- Prepare template HR1 notifications
- Train managers on collective consultation obligations
- Seek legal advice before large-scale redundancies
- Monitor for organisation-wide threshold regulations