Redundancy may be a commercial necessity, but it remains one of the more emotionally and legally complex steps an employer can take. Where multiple roles are affected, the law imposes additional duties, chief among them, a responsibility to consult with employees before any decisions are made.
For years, that process has centred around whether dismissals take place at a single “establishment”, but change is coming. A new Employment Rights Bill currently working its way through Parliament is set to widen the rules and raise the stakes for employers – though not overnight. While nothing has changed just yet, the legislation has advanced far enough to warrant a close look.
What the law says now
At the moment, the collective consultation duty kicks in when an employer proposes to dismiss 20 or more employees at the same site within a 90-day window. When that threshold is reached, consultation with employee representatives becomes mandatory, and the employer must also notify the Secretary of State.
The process is subject to minimum timescales – 30 days where fewer than 100 roles are affected, 45 days where the number exceeds that. And if an employer fails to consult properly, an employment tribunal can make a protective award of up to 90 days’ pay per employee.
The current rules revolve around the location of the dismissals, allowing businesses to treat each establishment as separate. That has enabled some employers to manage collective consultation risk by spreading redundancies across sites – a practice that is now firmly in the Government’s sights.
What the Employment Rights Bill proposes
The Bill introduces a second threshold. Alongside the existing ‘20 employees at one establishment’ rule, there would be a new trigger – consultation would be required where the number of proposed redundancies hits a certain level across the business as a whole, regardless of site.
The finer details, such as how many dismissals would be enough to cross that threshold, haven’t yet been published. Those will come later by way of secondary legislation. But the policy intention is clear: employers will no longer be able to sidestep consultation duties by treating each location in isolation.
The Bill also aims to strengthen enforcement. If passed in its current form, the maximum protective award would rise from 90 days to 180 days’ pay per affected employee. What’s more, a tribunal would be allowed to increase that award by a further 25% where an employer is found to have breached the relevant statutory Code of Practice.
One positive clarification is also included. Where redundancies happen at more than one site, the Bill confirms that consultation doesn’t have to be conducted all at once, company wide.
Employers will be able to consult in parallel at different locations – something that had long been done in practice, but which will now be expressly permitted.
When might these changes take effect?
For now, none of these proposals are in force. The Bill is still working its way through Parliament and has not yet received Royal Assent. Even once it does, implementation will be staggered.
The increase to the protective award cap is expected to take effect sometime next year. The broader consultation trigger across multiple sites will need further Regulations, so that part may take longer. The clarification on parallel consultations might come into effect more quickly, as it doesn’t require additional legislative work.
In the meantime, we expect updated guidance and revised Codes of Practice to be published. Until then, employers are working with broad outlines and policy statements, though those are becoming clearer by the month.
What employers should be thinking about now
The changes aren’t here yet, but they are coming, and that means now is the time to prepare.
Start by reviewing how your organisation monitors redundancy activity. If your systems only track proposed dismissals at a local level, that approach may no longer be sufficient. Under the new model, employers will need to assess dismissals across the entire workforce, even where decisions are being made independently at regional or departmental level. Cross-business visibility will become essential.
It’s also worth revisiting internal policies and consultation procedures. Many were drafted around the existing “one establishment” rule and may not reflect the wider triggers being introduced. Managers and HR teams, particularly those involved in operational restructuring, should be briefed and trained on the forthcoming changes, including how to recognise when consultation is legally required.
From a financial perspective, employers should also be taking stock. The maximum protective award is set to double, rising from 90 days’ pay to 180 days per affected employee, with a possible further uplift where there’s non-compliance with the relevant Code of Practice. That’s not a change many employers will be able to absorb lightly. Where restructures are planned in the next 12–18 months, it’s worth building in contingency for the increased exposure, and seeking advice early if the consultation process could be complex or contested.
In addition, this is a good moment to review benefit packages and contractual entitlements, especially where they are fixed or unusually generous. Long-standing arrangements may need to be revisited to ensure they remain commercially viable within a changing legal framework. Redundancy situations often highlight unexpected liabilities or inconsistencies in pay structures, so a clear understanding of what’s promised, and where flexibility exists, is key.
Finally, employers should stay alert to government guidance and consultations. The Department for Business and Trade has confirmed that it will issue new guidance on collective consultation once the legislation is in place. That guidance is expected to carry significant weight in shaping both employer practice and tribunal expectations. There may also be further opportunities to contribute to the detail of the reforms, particularly around how the new multi-site threshold will be calculated. For larger employers or sector bodies, active engagement in those consultations could help shape a more workable regime.
Looking ahead
The law around collective redundancy is evolving, but not overnight. These are reforms designed to modernise, not replace, the current structure. They reflect a world in which business is no longer confined to single sites or departments, and where decisions taken at head office ripple across dozens of locations.
As these changes move closer, employers should be taking stock. That doesn’t mean overhauling everything at once, but it does mean preparing to shift from a location-based model to a business-wide one, particularly when workforce change is on the horizon.
At Buckles, we’re working with employers across all sectors to help them plan ahead, manage risk, and ensure their processes are ready for what’s next. If your organisation is considering redundancies or workforce restructuring, we’re here to help you navigate both the current rules and those just over the horizon.
