The UK Employment Rights Act: changes to collective redundancies

The Employment Rights Act (“Act”) received Royal Assent on 18 December 2025 and the government plans a staged implementation over 2026 and 2027.

The Act includes 28 employment reforms and, cumulatively, the scale, breadth and complexity of the changes are significant for employers (read our tracker to keep abreast of developments across the Act and timescales for implementation).

To support employers as they respond to the Act’s diverse measures, our more detailed briefings focus on specific topics within the Act and include the latest developments and practical implications. In this briefing, we review the provisions that are expected to change how employers manage collective redundancy consultation, and the risks of not complying.

For our briefing focusing on the Act’s changes to:

• trade union and collective rights, read our update
• dismissal and re-engagement (“fire and rehire”), read our update
• family-friendly rights and SSP, read our update
• enforcement, read our update
• zero and low hours contract workers, read our update
• unfair dismissal, read our update
• equality and harassment duties, read our update

Collective redundancies

In summary, the Act provides for the duty to collectively consult on redundancies to be widened. The trigger for consultation will be either:

• 20 or more employees at one establishment, or
• in a case where employees are being made redundant at more than one establishment, a higher threshold number (that number to be determined in regulations)

The HR1 notification trigger will also be similarly amended. Employer penalties for a failure to consult collectively have increased, with the maximum protective award rising from 90 days’ to 180 days’ pay. Changes are also made to collective redundancy notifications for ships’ crew for operators of frequent services to British ports.  Employers should also note the Act’s changes to “fire and rehire”, as such projects may also fall within the scope of collective redundancy consultation duties (read our update).

What does the Act say?

Currently, where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, it must consult with representatives of affected employees. It must begin in good time and, where the employer is proposing to dismiss 100 or more employees at one establishment within a 90 day period, at least 45 days before the first of the dismissals takes effect, otherwise, at least 30 days. The 45/30 day timescale also applies to the employer’s duty to notify the Secretary of State of its redundancy plans, using form HR1.

The Act retains the existing “at one establishment” trigger and adds a second alternative trigger - to cover cases where employees are being made redundant at more than one establishment.

In the event of non-compliance, for dismissals on or after 6 April 2026, a protective award may be ordered of up to 180 (previously, it was 90) days' gross pay per affected employee (together with an uplift of up to 25%, if the employer also unreasonably failed to comply with the Code of Practice on dismissal and re-engagement, if applicable). A failure to provide the notification (HR1) risks a criminal offence.

The government must introduce regulations setting out the second trigger threshold number before the changes can come into effect. During a consultation on setting that second number, the government stated its preference for a single fixed number within the range of 250–1,000 redundancies (e.g. 250 redundancies across an organisation). However, alternative approaches are being considered, including different fixed numbers applying for small, medium and large employers. A Code of Practice on collective redundancy obligations will also be published.

Practical implications for employers

The new multi-establishment trigger is expected to result in more collective consultation, involving workplace representatives and trade unions. Employers should consider how they will pro-actively monitor the new trigger point and manage any such increase. Doubling the maximum protective award introduces significant new financial risks for a failure to comply with collective consultation.

More consultation?

For an employer with multiple sites at which redundancies ebb and flow, adding the second trigger outlined above will necessitate a change of approach. Currently, small-scale redundancy proposals across multiple locations do not, typically, trigger collective consultation. When the Act is implemented, such proposals in aggregate may meet the new threshold and the duty to inform and consult collectively applies. However, it does depend on how the threshold is defined and whether unrelated redundancies will be aggregated together (currently unclear). Employers should await the draft regulations for clarity.

In the meantime, the new multi-site trigger means that employers should act to collate all redundancy proposals across the employing entity on a rolling basis. This data will reduce the risk of inadvertent non-compliance when the new regulations are implemented.

Consulting whom and how?

During the Act’s passage in Parliament, some confusion over the scope of the consultation has been evident among employer representative bodies. In particular, how the new second threshold trigger involving multi-site redundancies would impact on consultation arrangements in practice. In response, the Act has clarified that:

• the duty is to consult only the representatives of employees affected by the proposed dismissals, or by measures taken in connection with them
• that consultation need not be carried out with all appropriate representatives together, or
• with a view to reaching the same agreement with all appropriate representatives

Some employers may prefer a site-specific, localised approach, while others may adapt a more centralised consultation arrangement. The employer has flexibility in this respect, provided it meets its legal consultation duties, or it risks penalties.

Standing bodies of representatives?

In response to an anticipated increase in collective consultation under the Act, and in the absence of recognised trade unions or existing employee representatives, some employers may decide on implementing a standing employee representative structure. Appointed or elected by employees, and having the authority to be consulted, a standing body is one potential option to support meaningful and timely redundancy consultation and to avoid the need for potentially more frequent, reactive elections.

Originally published: December 17, 2025