Employment Rights Act 2025: Government consults on a new organisation wide threshold for collective redundancy consultation

The Government is consulting on changes to collective redundancy rules, adding an organisation-wide trigger alongside the current test, due from 2027.

The Government is currently seeking views on changes to collective redundancy consultation rules under the Employment Rights Act 2025. The changes will bring in a new organisation-wide trigger for collective redundancy consultation, alongside the current establishment-based trigger. This change is expected to come into force in 2027.

The current trigger for collective redundancy consultation

Under current law, employers must consult with employee representatives where they propose to dismiss 20 or more employees at one establishment within 90 days.

Where this threshold is met, employers must begin consultation with representatives at least 30 days before the first proposed dismissal (where there are between 20-99 possible dismissals) or 45 days before the first proposed dismissal (where there are 100 or more possible dismissals).

These obligations apply to consultation with trade union or elected employee representatives and must be undertaken with a view to reaching agreement. They apply both to redundancy and to dismissal and re-engagement processes.

Failure to comply with this requirement exposes employers to the risk of protective awards of up to 90 days’ gross pay per affected employee. (The maximum protective award is set to rise to 180 days’ pay under the Employment Rights Act 2025.)

This establishment-based trigger means that employers with multiple sites may not currently be obliged to consult collectively where significant numbers of dismissals are proposed across the organisation, but with fewer than 20 being possible at any one site.

Further information and upcoming Employment Law Briefing from Wrigleys

For information on a recent EAT case which clarifies the current trigger, see our article: When must employers consult collectively on redundancy and change of terms dismissals? - Wrigleys Solicitors LLP.

For further information on changing terms of employment and how this interacts with collective redundancy consultation, the next in our series of Employment Law Briefings takes place on 31 March 2026 and will be a deep dive into the process and pitfalls for changing terms of employment, including the current rules on dismissal and re-engagement. Please note that this is a free in-person event at our Leeds office and places are limited. To book your place, please visit:  Employment Law Briefing – Changing Terms of Employment - Wrigleys Solicitors LLP.

The proposed changes

The Government consultation seeks views on how the new organisation‑wide threshold should be determined. The options include:

• A single fixed number of proposed dismissals across the whole organisation
• A percentage of the number of employees of the organisation
• Tiered thresholds based on employer size
• Hybrid models combining fixed numbers and percentages

Preferred approach: a single fixed number threshold

The government’s preferred approach is to adopt a single fixed number for the whole-organisation trigger, set between 250 and 1,000 proposed dismissals within 90 days. The Government considers that this approach will have the benefit of simplicity and will avoid the complexity and uncertainty of setting a number tied to employer size or headcount.

Impact on employers

Whichever method is ultimately chosen, larger multi-site employers are likely to see the greatest impact from this change, with increased obligations to consult collectively where proposed dismissals are dispersed across a range of employer locations.

Employers with recognised trade unions often consult with trade unions in any event (whether the current establishment threshold is met or not) to lower the risk that claims will be brought for a failure to inform and consult, for example where there is some doubt about whether an employer unit counts as an establishment.

The introduction of an organisation-wide trigger is likely to lead to more routine use of collective consultation. Employers who do not have a recognised trade union may decide to put in place a nominated / elected employee forum with the remit to consult on redundancy and dismissal and re-engagement proposals in order to reduce the administrative burden of having to facilitate this process at the outset of each separate redundancy or change process.

Having your say on the proposals

The government is actively seeking evidence and views from employers, HR practitioners, representative bodies, and unions. The consultation can be accessed at Make Work Pay: threshold for triggering collective redundancy obligations - GOV.UK. The consultation closes on 21 May 2026.

Specific advice should be sought for specific situations. If you have any queries or need any legal advice, please feel free to contact Wrigleys Solicitors.