Consultation on new organisation-wide trigger for collective redundancy consultation

Background

At present, employers must collectively consult where they propose 20 or more redundancies at one establishment within a 90-day period. Where that threshold is met, consultation with appropriate employee representatives is required and the proposed redundancies must be notified to the government.

The Employment Rights Act 2025 introduces an additional trigger. In future, collective consultation will also be required where a specified number of redundancies are proposed across the employer’s entire organisation, even if no single site reaches 20.

The existing “20 at one establishment” test will remain in place. The new organisation-wide trigger will sit alongside it.

The consultation seeks views on how that new threshold should operate and at what level it should be set.

How should the new threshold be set?

Four models are outlined:

A single fixed number (for example, 500 redundancies across the organisation)
A percentage of the total workforce
Different fixed numbers depending on employer size
A hybrid model combining percentages and fixed numbers.

The government’s lead proposal is a single fixed number, on the basis that it is the simplest and provides the greatest certainty for employers, employees and trade unions. It has indicated that it does not favour percentage-based approaches, as these would require ongoing workforce calculations and could create disputes about whether the threshold has been met.

At what level?

The consultation proposes that the organisation-wide threshold should fall between 250 and 1,000 proposed redundancies within a 90-day period.

It suggests that setting the threshold below 250 could place disproportionate burdens on smaller and medium-sized employers. Conversely, setting it above 1,000 could allow very large redundancy programmes to proceed without collective consultation where job losses are spread across multiple sites.

Views are invited on whether the fixed threshold should be 250, 500, 750 or 1,000.

An alternative tiered approach (with different fixed numbers applying depending on overall workforce size) is also described, but this is not the preferred option.

Protective awards

Separately, the maximum protective award for failure to comply with collective consultation obligations is due to double from 90 to 180 days’ pay. This change is currently expected to take effect in April 2026.

Learning points for employers

The proposed organisation-wide thresholds are relatively high, meaning the additional obligations are likely to affect only larger employers undertaking substantial redundancy exercises. For many businesses, the practical position will remain unchanged.

However, multi-site employers should ensure that proposed redundancies are monitored centrally, as dispersed job losses may in future trigger collective consultation even where no single site reaches 20 redundancies.