FAQ/redundancy – when should UK employers start collective consultation?

The Employment Rights Act 2025 has significantly raised the stakes for employers carrying out large-scale redundancies. From 6 April, new rules have come into force increasing the maximum protective award for failing to comply with collective consultation obligations from 90 days’ pay to 180 days’ pay per affected employee, materially increasing the financial exposure for employers who get it wrong, although in some phased redundancy exercises the position may be more complex depending on when individual dismissals take effect.

So, when should employers start collective consultation in a redundancy exercise? It is a question we are often asked. On the line from Glasgow to help with that, Laura Kennedy:

Laura Kennedy: “The duty to collectively consult arises when an employer is “proposing” to dismiss 20 or more employees at one establishment within a period of 90 days or less. The important point is that the trigger is a proposal, not a final decision. So, consultation must begin while the proposals are still at a formative stage and capable of change, and it must be carried out “in good time.” There are strict statutory minimum periods. So, where 20 to 99 redundancies are proposed, consultation must begin at least 30 days before the first of those dismissals takes effect. Where 100 or more redundancies are proposed that minimum period increases to 45 days. But, as I say, those are minimum timeframes. Tribunals will look closely at whether consultation was genuine and meaningful. If the business case is already fixed, and your selection pools have already been decided, and you’ve already completed the scoring before the consultation has begun, then there is a real risk that the process will be viewed as presenting employees with a fait accompli. So timing is really critical.”

Joe Glavina: “Of course, we now have the Employment Rights Act 2025. Has that changed when consultation must start?”

Laura Kennedy: “No, the Act doesn’t change the legal trigger. Employers must still begin consultation when redundancies are proposed, not when the decision has already been made. What the Act has changed so far is the maximum protective award. That has increased from 90 days’ pay to 180 days’ pay per affected employee. So, although the legal test remains the same, in that respect the financial consequences of getting the timing wrong are significantly greater. So, for larger redundancy exercises, the potential exposure is now even more substantial.”

Joe Glavina: “And are there any further collective redundancy reforms under the Act that employers should be aware of?”

Laura Kennedy: “Yes there are. The Act includes powers to introduce an additional collective redundancy trigger which could apply across an employer’s business as a whole, rather than being confined solely to redundancies at one establishment. The detailed regulations are still to come, and the existing “one establishment” test remains the current law, but employers will need to monitor developments carefully, particularly where redundancies are being considered across multiple sites or in phases. So the key message is that employers should take advice early. With increased penalties and further reforms on the way, getting the timing right at the outset is more important than ever.”

We have added this programme to our FAQs series of programmes. To find them just type ‘FAQ/redundancy’ in the search engine of the Out-Law website.