Navigating the Shift: Changes to Collective Redundancies in the UK

Collective redundancies in the UK occur when an employer proposes to dismiss as redundant 20 or more employees at one “establishment” within a period of 90 days or less. This trigger mandates a specific legal process of information and consultation with employee representatives, such as trade unions or elected staff members. 

As of 6^th April 2026, the financial penalty for failing to comply with these consultation obligations has increased dramatically. The maximum protective award that an Employment Tribunal can order has doubled from 90 days’ pay to 180 days’ actual gross pay per affected employee. 

Unlike many other employment claims, this award is uncapped, meaning there is no statutory limit on the weekly pay amount used for the calculation. This change is designed to deter employers from “buying out” their legal duties. This is a practice where companies might previously have calculated that paying a 90-day fine was more efficient than conducting a full 45-day consultation. For dismissals taking effect on or after this date, the stakes are now twice as high. 

The Current Correct Process for Collective Redundancies

To avoid these steep penalties, employers must follow a rigorous statutory framework: 

1. Notification (Form HR1): Employers must notify the Secretary of State via Form HR1. Failure to do so is a criminal offence.
2. Minimum Consultation Periods:
   • 20–99 redundancies: Consultation must begin at least 30 days before the first dismissal.
   • 100 or more redundancies: Consultation must begin at least 45 days before the first dismissal.
3. Meaningful Consultation: The process must be genuine and cover ways to avoid dismissals, reduce the number of affected staff, and mitigate the consequences.
4. Provision of Information: Employers must provide representatives with specific written information, including the reasons for proposals, the numbers and descriptions of employees involved, and the proposed selection criteria. 

Tips for Managing the Process

• Centralise Your Tracking: Don’t view sites in isolation. Monitor planned redundancies across all branches to ensure you don’t accidentally hit a trigger point.
• Training is Vital: Ensure HR and line managers understand that “consultation” isn’t just a presentation of final decisions; it must be a “meaningful” exchange where staff suggestions are considered.
• Don’t Rush: Given the 180-day penalty, shortcuts are now an existential financial risk. Allocate more time than the statutory minimum to ensure the process is “just and equitable”.
• Check the Code: Tribunals may apply an additional 25% uplift to awards if an employer unreasonably fails to follow relevant ACAS Codes of Practice. 

Looking Ahead: The 2027 Threshold Expansion

The Employment Rights Act 2025 introduces further changes set for 2027. Currently, the 20-person trigger only applies to a single “establishment” (typically one office or factory). 

From 2027, an organisation-wide trigger will be added. This means that even if you only make five redundancies at four different sites (totalling 20), you will likely be required to consult collectively. The government is currently consulting on the exact threshold, which may be a fixed number between 250 and 1,000 or a percentage of the total workforce. This is an open consultation, and the government are seeking feedback on what the new organisation-wide threshold should be for triggering collective redundancy obligations and how it should be determined. For more information and to respond to this consultation, please click here.

In short, as of April 2026, UK collective redundancy penalties have doubled to 180 days of uncapped pay per employee, significantly raising the financial risk of procedural failures. Organisations must centralise redundancy planning to manage these risks and prepare for 2027, when thresholds will shift from site-specific to company-wide, requiring collective consultation even for dispersed, smaller-scale reductions.

To find out more or discuss managing collective redundancies, please get in touch with our team of experts.

T: 0330 107 1037

E: contact@hpc.uk.com

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