Manage redundancies correctly
How to make employees redundant fairly and legally. Covers collective consultation requirements, fair selection criteria, statutory redundancy pay …
Collective redundancy: updated consultation rules
Updated guidance on collective redundancy consultation following ERA 2025 changes, including doubled protective award and new organisation-wide threshold.
UK-wide
Guide summary
From April 2026, the fine for not consulting on 20+ redundancies doubles to 180 days' pay per employee. A new rule in 2027 may also require consultation for smaller redundancies spread across multiple sites. You must consult with employee representatives and notify the government before making redundancies.
- Consult with employee reps before making 20+ redundancies at one site
- Notify the Secretary of State using HR1 form at least 30 days before dismissal
- From April 2026: fine is 180 days' pay per employee (up from 90)
- From 2027: new rule may apply for smaller redundancies across multiple sites
- 20-99 redundancies: minimum 30 days consultation
- 100+ redundancies: minimum 45 days consultation
- Penalty for not notifying Metropolitan Government is an unlimited fine
- Do not split redundancies to avoid consultation
- Track redundancies across all sites in rolling 90-day periods
On this page
UK-wide
Related guides in Employment & HR
Trade union rights: what has changed for employers
Overview of trade union reform under the Employment Rights Act 2025, including workplace access rights, electronic balloting, simplified …
Recruit international talent with Scale-Up Visa
How to sponsor skilled workers on the Scale-Up Visa route for high-growth businesses.
DBS checks for employers
When and how to request Disclosure and Barring Service (DBS) checks for employees. Includes check types, fees, regulated …
Working time: legal limits and rest breaks
Legal requirements for maximum working hours, rest breaks, and annual leave. Covers the 48-hour weekly limit, opt-out agreements, …
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 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.
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.
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