The obligation to carry out collective consultation arises whenever you are proposing to dismiss 20 or more employees as redundant within a 90-day period.
Collective redundancy consultation obligations can arise earlier than you expect. The duty can be triggered when plans are still developing and not finalised. To avoid penalties, employers should take advice early and take precautions if the number may exceed 20.
A recent Employment Appeal Tribunal decision highlights this important point.
Ellard v Alliance Transport Technologies Ltd
In the case of Ellard v Alliance Transport Technologies Ltd, a company went into administration and began making redundancies. Initially, 15 employees were made redundant, with more following a few days later when a potential buyer pulled out, bringing the number to over 20.
The employer argued that, at the earlier stage, collective consultation rules didn’t apply because fewer than 20 redundancies were planned. However, the Employment Appeal Tribunal (EAT) disagreed.
The EAT said the key question was whether the employer was proposing to dismiss 20 or more employees within a 90-day period. Importantly, a ‘proposal’ doesn’t have to be final. It can exist even if:
- plans are still developing, and
- other options (like a sale) are still being explored
In this case, by the time the first redundancies happened, a sale was no longer realistic and closing the business had effectively become the plan – even if not formally confirmed. That was enough to trigger the duty to collectively consult. Because consultation didn’t happen, employees were awarded 90 days’ pay.
3 things to remember if you’re managing multiple redundancies
1. Think about collective consultation at an early stage – don’t wait until decisions are final
2. If large-scale redundancies are a real possibility, take advice early
3. Keep under review whether alternative options are genuinely viable
NOTE: From April 2026, the Employment Rights Act 2025 has increased compensation for getting this wrong from 90 – 180 days’ pay per employee – so acting early is more important than ever.
Further reading
- Collective redundancy consultation – what are the rules? — Hunter Law
- Collective consultation for redundancy – ACAS
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