Changes to redundancy and collective consultation

The Employment Rights Act 2025 (the Act) brings change to the collective redundancy process.

Increase to the maximum protective award

From 6 April 2026, the maximum protective award for an employer’s failure to comply with collective redundancy obligations will double from 90 days to 180 days’ pay per affected employee. This is the maximum amount an Employment Tribunal can award when an employer fails to meet its collective redundancy obligations.

This will apply to all dismissals taking place on or after 6 April 2026.

When collective consultation obligations apply

The collective consultation obligations apply where an employer is proposing 20 or more redundancies at one establishment within a 90-day period. All affected employees may bring a claim for a protective award if an employer fails to properly consult appropriate employee representatives.

New organisation-wide threshold test (2027)

The Act also introduces an additional, threshold test for employers. The threshold test means that employers will be required to undertake collective redundancy obligations when it proposes to make redundancies which meet or exceed the threshold number across their entire organisation within a 90-day period i.e. not just at one establishment. The details of the threshold will be set by future regulations and is expected to commence in 2027.

What should employers do to prepare?

1. Review policy documents to ensure that your collective redundancy policy and procedure reflects the change in law.
2. Discuss the update with management so that they are clear on the process and aware of the increased penalties for failure to comply.
3. Take legal advice if you are planning a wide scale redundancy or unsure if collective consultation is triggered.

Employment law experts

If your organisation is planning restructuring or needs clarity on how the Employment Rights Act 2025 affects your legal duties, our specialist employment law team is here to help. We support employers through every stage of the redundancy process, from policy updates to consultation strategy and risk management. Get in touch with our employment experts today to ensure your business stays compliant and protected.