Employment Rights Act 2025: Consultation on new collective redundancy threshold published

Background

Under the Employment Rights Act 2025, employers will be required to undertake collective redundancy consultation and notify the Secretary of State of proposed redundancies whenever they propose to make a threshold number of employees redundant across their entire organisation. This will be in addition to the current consultation and notification requirements which apply where an employer proposes 20 or more redundancies at one establishment within a period of 90 days or less. These obligations apply not just to redundancies in the traditional sense, but extend to all dismissals for a reason not related to the individual employee and so encompass, for example, dismissals as part of a restructuring exercise or dismissal to effect changes to employment contracts (commonly known as fire and rehire/dismissal and re-engagement).

Consultation

In setting the organisation-wide threshold, the Government is considering four options. In considering these options, it is led by the following principles:

• Redundancy rights should be strengthened and offer protection to employees who do not currently benefit from collective redundancy consultations
• The changes should not lead to larger employers being left in a constant state of consultation, and
• There should be certainty and clarity for both employers and employees.

The options being considered are:

• A single fixed number - so obligations would be triggered whenever an employer proposes to dismiss as redundant at least that fixed number within a period of 90 days or less
• A percentage-based threshold – so obligations would be triggered whenever an employer proposes to dismiss as redundant a set percentage of its total number employees
• Different fixed numbers, according to employer size (with size determined by the number of employees it employs), and
• Both fixed numbers and a percentage threshold, according to employer size. Under this option, there would be a percentage threshold where an employer employs fewer than a X employees and a fixed number threshold where it employs more than X employees.

The Government notes the complexity of all but the first option, with employers having to calculate employee numbers accurately in order to work out whether collective redundancy obligations apply. Similarly employee representatives and trade unions may have difficulty in understanding whether the employer has breached its obligations, leading to further disputes and disagreements.

The Government is minded to use a single fixed number to set the organisation-wide threshold and to set the fixed number within the range of 250-1,000 proposed redundancies. It describes this as its “lead proposal”.

If it were instead to opt for different fixed numbers according to employer size, it considers that obligations should be triggered as follows:

• Where 250 redundancies are proposed, for employers employing up to 2,499 employees
• Where 500 redundancies are proposed, for employers employing 2,500 to 9,999 employees, and
• Where 750 redundancies are prosed, for employers employing 10,000 or more employees.

The Government seeks views on its proposals. Responses to the consultation are required by 21 May 2026.