Collective redundancy consultation – what are the rules?

The duty to collectively consult kicks in where 20 or more redundancies are proposed at one establishment within a 90-day period. The rules are laid out in the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).

TULRCA requires at least 30 days’ consultation (or 45 days where 100 or more redundancies are proposed.

Wider definition of redundancy

In this situation “redundancy” includes most ‘no-fault’ dismissals, not just traditional redundancy situations. This includes dismissals for “some other substantial reason” (SOSR) – for example, business reorganisations may also count towards the threshold.

Proposed dismissals is a forward-looking test

When considering how many employees are potentially affected, you should also focus on proposed dismissals, not those already completed. In December 2025, in Micro Focus v Mildenhall, the EAT confirmed that the 90-day test is forward-looking.  This means planned redundancies will be captured, not historic ones.

Other important points to remember:

• Always assess collective consultation obligations early.
• Voluntary redundancies count towards the 20-employee threshold
• Fixed-term contracts are not counted only if they expire naturally; early termination will count
• The threshold is considered per legal entity, not across a group
• The concept of “establishment” is vitally important, meaning different sites are generally assessed separately (but see below).
• Failure to follow the rules can mean significant financial penalties, potential uplifts in compensation, and even criminal liability for failing to file an HR1 form.

Employment Rights Act 2025 – protective award has doubled

The consequences of getting this wrong are significant—and have now increased.

Since 6 April 2026, the maximum protective award for failure to collectively consult has doubled from 90 to 180 days’ gross pay per affected employee, and this is uncapped. For large-scale exercises, this can be a major financial exposure.

Failure to comply can result in significant financial penalties, potential uplifts in compensation, and even criminal liability for failing to file an HR1 form.

Looking ahead to more changes

The Employment Rights Act 2025 introduces more potential changes (likely from 2027), with proposals to add a new threshold based on total redundancies across a business, not just within the “establishment”.

This proposal is pending consultation. The preferred option is to use a figure trigger only, (proposed to be between 250-1000 redundancies across a business). Keep an eye on our bulletins for developments in this area.

Further reading:

• Collective consultation – redundancy – ACAS
• Employment Rights Act – Prep for April – Hunter Law
• Employment Rights Act – Road Map – Hunter Law

---