Collective redundancies under the Employment Rights Bill

Redundancies can be daunting for businesses and individuals alike. Add in the concept of collective redundancies, and it can feel overwhelming. The Employment Rights Bill is set to introduce significant changes to collective redundancy rules, with some of the first reforms due to take effect in April 2026. This article outlines what’s changing – and how employers can prepare.

What is collective redundancy?

A collective redundancy arises when an employer proposes to dismiss 20 or more employees at one establishment within a 90-day period.

In such cases, employers have specific duties under the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA):

• Consultation: Employers must consult with representatives of affected employees. Failure to do so can result in a protective award of up to 90 days’ pay per employee.
• Notification: Employers must notify the Secretary of State using Form HR1. Failure to notify is a criminal offence, punishable by an unlimited fine.

Practical tip: Employers should ensure they have robust internal processes for identifying when collective consultation obligations are triggered – especially where redundancies are being considered across multiple departments or sites.

What changes to collective redundancies are proposed under the Employment Rights Bill?

The Bill is set to make significant reforms to the employment law landscape, with changes phased in from April 2026 and into 2027 (for full details of the reforms see our central resources hub). Here’s what’s coming in respect of collective redundancies:

From April 2026:

1. Doubling the protective award

The maximum protective award for failure to collectively consult will increase from 90 days’ pay to 180 days’ pay per affected employee.

Additionally, under the updated Statutory Code of Practice on Dismissal and Re-engagement, employment tribunals may apply a 25% uplift where an employer has unreasonably failed to consult. This could mean a total liability of 225 days’ pay per employee. The rationale behind this change is to make it increasingly unattractive for employers to 'buy out' employees' collective rights in a redundancy exercise.

Practical tip: Employers should review their redundancy procedures and ensure they align with the Code. Consider training HR/People teams and line managers on the consultation standards.

From 2027:

2. New trigger for collective consultation

The current trigger – 20 or more redundancies at one establishment – will remain. However, a new threshold will be introduced, requiring employers to aggregate redundancies across the business, not just at a single site.

The exact threshold (number or percentage of workforce) will be set out in Regulations.

Practical tip: This will particularly affect organisations which operate across more than one location. Employers with multiple sites should implement centralised tracking of redundancy proposals to monitor whether the new threshold is met. This may require closer coordination between HR/People teams across locations.

3. Extension of notification duties to seafarers

Operators providing regular services to British ports will be required to notify the Secretary of State of proposed redundancies—even if affected employees work aboard ships registered outside Great Britain.

Practical tip: Maritime employers should review their compliance processes and ensure they are ready to meet notification obligations under the new regime.

What's not changing (yet)

There were discussions about increasing the minimum consultation period from 45 days to 90 days for proposals involving 100+ redundancies. However, this proposal has not been pursued by the Government.

Practical tip: Employers may wish to build in flexibility to extend consultation periods voluntarily – particularly in complex or high-risk redundancy exercises – to avoid criticism. That said, the current 30/45-day consultation windows remain in place and can continue to be relied upon.

See our Blog for more information on handling a collective redundancy and the top 10 pitfalls to avoid when conducting redundancy exercises.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, October 2025