Collective redundancy consultation: when the duty arises and what is changing

If an employer is proposing 20 or more redundancies within a 90-day period, it must undertake collective consultation. Failing to do so can result in a hefty penalty, which was increased on 6 April 2026 to 180 days' pay per dismissed employee (doubled from 90 days' pay). These penalties are uncapped and therefore can present significant potential liability for employers, in addition to the standard remedies for unfair dismissal and potential criminal liability for failing to notify the Secretary of State. It is therefore critical for employers to understand and comply with their collective consultation obligations.

The Employment Appeal Tribunal in Micro Focus Limited v Mildenhall has provided some clarity for employers in assessing when collective consultation obligations might be triggered.  However, employers should also be prepared for upcoming amendments to the threshold tests to apply to 'organisation-wide' redundancies, and the proposed extension to required timeframes.

When is collective redundancy consultation required?

Collective consultation will be required where there are:

• 20 or more redundancies which are proposed in a 90-day period; and
• Those redundancies are proposed within a single 'establishment'.

The 90-day period is a forward-looking and evolving assessment

The Mildenhall case clarified that an employer must look at how many redundancies are being proposed in the next 90 days at that point in time. To assess if collective redundancy obligations are triggered, it does not necessarily need to combine redundancies that may have occurred in the past with those that are subsequently proposed. The test looks at any given point in time and must be kept under review as proposals develop, but it does not require employers to count dismissals with hindsight once events have unfolded. That said, if earlier dismissals show a wider redundancy programme was already underway, and the dismissals were part of a single overall plan, a tribunal is likely to find that the duty to consult arose sooner.

Proposed redundancies by the same employer within a single establishment

Mildenhall also clarifies the position that redundancy proposals need only be counted where they are made by the same employer within a single 'establishment'. Redundancies affecting employees across other companies in the same corporate group do not automatically have to be aggregated, even where a restructure is group‑wide. Where more than one employer operates from the same establishment, the number of redundancy proposals is assessed separately for each employer.

An 'establishment' is usually a distinct operating site or unit, although that is not always the case. Multiple sites can constitute one establishment if that is the organisational reality and they are sufficiently integrated, although this will always turn on the specific facts.

New organisation-wide threshold

However, the Employment Rights Act 2025 will introduce a new 'organisation-wide' threshold for triggering collective consultation which will count the number of redundancies proposed across the employer's organisation as a whole, rather than just a single site. The exact threshold will be specified by regulation but will sit alongside the existing 'single establishment' threshold (ie it is in addition to, not instead of). The change is expected to come into force in 2027.

The Government is currently consulting on what the threshold should be and how it should be calculated. Its preferred option is to implement a fixed threshold of between 250 and 1,000 redundancies organisation-wide. The main alternative under consideration is a tiered approach based on workforce size, which would add an additional level of administrative complexity. For more details, see our article on the consultation proposals here.

What is required in a collective consultation process?

Once an employer has determined that it is proposing 20 or more redundancies across a single establishment within a 90-day period, it will need to collectively consult. This is additional to the individual consultation that is required for any employee whose role may be at risk because of a redundancy proposal in the usual way.

What/who?

Collective consultation entails consulting with appropriate representatives of the employees affected by the proposals. This may be representatives of a recognised trade union, or representatives that may be elected for the purpose of the consultation. It will be key to ensure that any representatives are properly appointed and authorised to be consulted about the proposed dismissals.

The Secretary of State must also be given advance warning of the redundancy proposals.

When?

The Mildenhall decision confirms the position that, for consultation to be meaningful, consultation with staff must begin in the "formative stages" rather than waiting until decisions are effectively "past the point of no return".

Timeframe?

Once consultation has commenced, and advance notice has been given to the Secretary of State, a minimum period must elapse before the first dismissal can take effect. Currently the position is that:

• Where 20 or more redundancies are proposed, at least 30 days must lapse before the first proposed termination takes effect; and
• Where 100 or more redundancies are proposed, at least 45 days must lapse before the first proposed termination takes effect.

However, the government intends to consult on a proposal to double the time required before a termination takes effect in the case of 100 or more proposed redundancies (ie 90 days rather than the current 45 days). If implemented, this would make advance planning of any restructuring even more critical and may significantly reduce organisational flexibility.

Practical takeaways for employers

As highlighted above, getting collective consultation wrong can result in significant penalties of up to 180 days' pay for each affected employee. This is not based on actual loss to the employee but is intended to penalise an employer for the seriousness of the non-compliance. An employer proposing large-scale redundancies would therefore be wise to ensure it is complying with its obligations and seek advice if required.

Based on the current law and in light of upcoming updates, employers should:

1. Educate managers about what triggers collective consultation obligations, and explain the significant penalties that could be applied to each dismissal if obligations are not complied with.
2. Be prepared to plan several months ahead of schedule where multiple redundancies are proposed.
3. Look out for updates on the government's consultations on the Employment Rights Act changes to the collective redundancy regime.
4. Establish processes and an audit trail to ensure that proposed redundancies are monitored across the establishment at any given time (and in due course across the wider organisation).

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

© Farrer & Co LLP, April 2026