UK: Collective Redundancy Consultations – ERA 2025

The Employment Rights Act 2025 (ERA) proposes changes to the collective redundancy consultation rules. These changes are likely to be effective from 2027.

Under the current rules, the obligation to consult arises when an employer proposes redundancies of 20 or more at a single “establishment” within a 90-day period.  The redundancy numbers calculation is establishment specific rather than organisation wide.

The changes keep the existing single establishment obligation but add a new obligation to consult when the proposed redundancies reach a level calculated across the multiple establishments of a single organisation.

Multi-site employers, making small numbers of unrelated redundancies across different sites, may find themselves inadvertently in breach of the new consultation rules. The financial impact of a breach can be very significant indeed.

Summary

Collective redundancy consultation will be required when an employer proposes redundancies:

• for 20 or more employees at one establishment; or
• a to be determined number across multiple sites of the employer’s organisation;

within a 90-day period, as now. 

Current proposals:  the precise trigger for multi-site consultation is still under discussion.  The leading proposal is for a fixed number of proposed redundancies between 250 and 1,000. Another option is for tiered trigger points relating to employer size.  The Government is consulting on this.

The redundancy count will be at employer entity level rather than whole group level. The count will therefore not be across different subsidiaries in a corporate group.

Cost of breach: The maximum protective award for a breach has doubled from 90 days to 180 calendar days’ uncapped pay, for each affected employee.

Actions for employers in anticipation of the new regime

• Centralised tracking needs to be established for redundancy proposals (not actual dismissals) across all the establishments of a specific entity;
• Consultations across multiple sites willneed planning; employers should prepare internal protocols for conducting such consultations, to stay within the rules;
• Standing employee representative bodies for larger employers where no trade union is present maybe a useful time saver, rather than relying on the need for elections when a consultation is actually triggered;
• Training to ensure HR teams are aware of the new obligations.      

This is a high-level general update only. Legal advice should be obtained on specific circumstances.