Employment Law Guide 2026: Collective redundancies

The ERA 2025 includes provisions which will mean that employers’ statutory collective consultation obligations in relation to redundancies will be triggered more frequently. In addition, the penalty for failure to comply with statutory collective consultation obligations (the Protective Award) is being doubled meaning that it is more important than ever to understand when these obligations apply and how to comply.

Currently, employers must consult collectively with appropriate employee representatives where they propose to dismiss 20 or more employees for redundancy at one establishment within a period of 90 days or less. The consultation process begins with the provision of specified information about the proposed redundancies to the representatives and consultation must begin at least 30 days before the first dismissal takes effect, increasing to 45 days where 100 or more redundancies are proposed. A redundancy dismissal is widely defined for these purposes to include any dismissal for a reason not relating to the employee concerned. This means that as well as traditional redundancies (where a workplace is closed or fewer employees are needed to do the work), dismissals due to a restructuring or in order to bring about a change in contractual terms are also included. Employers must also notify the Secretary of State via an HR1 form of the proposed redundancies in the same timescales, and failure to do so is a criminal offence. It is also worth noting that the HR1 form now has to be completed online and can no longer be sent by email or in advance of proposed consultation commencing.

Failure to comply with collective consultation obligations can lead to employment tribunal claims for a Protective Award, which, if successful, currently results in the employer being ordered to pay up to 90 days’ full pay to each affected employee. From April 2026, the maximum protective award will double to 180 days’ full pay.

Later in the year, in October 2026, the obligation to consult collectively and notify the Secretary of State will be extended. In addition to the current threshold (20 or more proposed redundancies at one establishment) there will be a new threshold test. This threshold number will apply across the whole business, rather than just a single workplace/site/office. The threshold number is not currently known (but will not be lower than 20) and will be specified in separate regulations. It may be either a specified number of employees ora percentage of the total workforce, or may be determined in some other way. Where the threshold number is met, collective consultation will have to begin/the Secretary of State will have to be notified at least 30 days before the first dismissal takes effect. This will increase to 45 days before where 100 or more redundancies are proposed.

Implications/Action points

• There will need to be greater oversight of redundancy/ restructuring exercises and contract changes across the whole business in order to identify when collective consultation obligations will be engaged
• Redundancy processes are likely to take longer to implement as the longer 45-day requirement will apply more often than currently
• There will need to be greater emphasis on compliance due to increased penalties
• Settlement costs may increase where employees are unwilling to compromise higher-value claims for less.