Employment Rights Bill: What’s new on collective consultation for redundancies

The Employment Rights Bill introduces important changes to the UK’s collective redundancy consultation regime. While the familiar framework remains recognisable, the Bill significantly widens when collective consultation may be required and increases the risks for employers that fail to comply. Although much of the detail will be confirmed through secondary legislation during 2026 and 2027, organisations should begin preparing now.

The Employment Rights Bill has now received Royal Assent, marking the final stage of the legislative process. Employers should be aware that the Bill is now law, with further detail on commencement dates and practical implications to follow.

1.      Doubling the Protective Award

From April 2026, the maximum protective award for failure to comply with collective consultation obligations will increase from 90 days’ pay to 180 days’ pay per affected employee.

In addition, the updated Statutory Code of Practice on Dismissal and Re-engagement allows employment tribunals to apply an uplift of up to 25% where an employer has unreasonably failed to consult. In practice, this means that liability could rise to the equivalent of 225 days’ pay per employee in serious cases.

The clear policy intention is to deter employers from treating protective awards as a manageable cost of doing business. Collective consultation failures are expected to attract much closer scrutiny, and the financial consequences of getting the process wrong will be considerably more severe than under the current regime.

2.      A New Trigger for Collective Consultation

The more substantive change comes later, from 2027, when a new trigger for collective consultation is expected to be introduced through regulations.

The existing rule of requiring collective consultation where 20 or more redundancies are proposed at one establishment will remain in place. However, this will be supplemented by a new requirement to aggregate redundancies across the business as a whole, rather than assessing each site or location in isolation.

The precise threshold has not yet been confirmed and may be expressed as a fixed number of redundancies, a percentage of the workforce, or a combination of both.

What is clear is that employers will no longer be able to avoid collective consultation by spreading redundancies across multiple sites or running phased exercises. This change will be particularly relevant for organisations operating across several locations.

3.      Extended Notification Duties for Maritime Employers

Also expected from 2027 is an extension of notification duties in relation to seafarers. Operators providing regular services to British ports will be required to notify the Secretary of State of proposed redundancies, even where the affected employees work on ships registered outside Great Britain.

4.      Consultation Timing and Process

The minimum statutory consultation periods have not yet changed. Employers must still consult for at least 30 days where 20 to 99 redundancies are proposed, and at least 45 days where 100 or more redundancies are proposed, before the first dismissal takes effect. However, the government has signalled that longer consultation periods may be introduced for larger exercises, and this remains an area to watch closely as regulations are developed.

How we can help:

1.    We can review and develop redundancy policies, templates and processes to align them with the updated Code.

2.    We review proposed or upcoming restructures to assess whether collective consultation is triggered now or likely to be triggered under the new aggregation rules, highlighting potential risks.

3.    We can provide practical advice on how to navigate a redundancy process from start to finish, assisting with documentation throughout.

4.    We can help deliver line manager and HR training on handling high risk redundancy exercises.