The changes broaden the scope of consultation requirements, increase financial exposure for non-compliance, and heighten enforcement risk—making early planning and risk management more critical than ever.
What’s Changing?
Under the current legal framework, collective redundancy consultation obligations arise where an employer proposes 20 or more redundancies at one establishment within a 90-day period. In these circumstances, employers must consult either a recognised trade union or elected employee representatives and notify the Secretary of State before dismissals take effect. Failure to comply can result in criminal liability and substantial financial penalties.
Currently where the obligation is trigged an employer must consult either the recognised trade union or elected employee representative where there is no recognised trade union:
- at least 30 days before the first proposed dismissal or redundancy, if there are between 20 and 99 employees being made redundant in a period of 90 days or less;
- at least 45 days before the first proposed dismissal or redundancy, if there are 100 or more employees being made redundant in a period of 90 days or less.
The Employment Rights Bill proposes to strengthen these protections further. In addition to the existing “single establishment” test, collective consultation obligations would also be triggered where a threshold number of redundancies is proposed across the employer’s organisation as a whole. The precise threshold will be set by secondary legislation following consultation, but the direction of travel is clear: more redundancy exercises are likely to fall within the collective consultation regime.
The Bill also increases the maximum protective award that an Employment Tribunal may make for failure to comply with collective consultation requirements, doubling it from 90 to 180 days’ gross pay per affected employee – significantly increasing the potential cost of getting it wrong.
Further reforms are proposed in relation to seafarers. Employers would be required to notify the Secretary of State of proposed collective redundancies affecting crew working on ships registered outside Great Britain where those vessels operate predominantly in or from Great Britain. The legislation also clarifies that employees will not be excluded from protection solely because they spend some time working outside Great Britain unless they are ordinarily based abroad.
What Does This Mean For Employers?
- Wider scope for collective consultation
Employers may be required to consult even where redundancies are spread across multiple sites, depending on the new organisation-wide threshold.
- Earlier and more detailed risk assessment
Workforce restructuring plans will need careful analysis at an early stage to determine whether collective consultation obligations are triggered.
- Increased financial exposure
The doubling of the maximum protective award significantly raises the stakes for non-compliance.
- Additional obligations for maritime employers
Employers operating ships that regularly enter or trade from Great Britain will face expanded notification requirements.
- Greater enforcement risk
The proposed changes underline the importance of compliance, documentation, and timely notification to avoid criminal sanctions and tribunal claims.
Employers contemplating redundancies should review their consultation processes now, ensure notification requirements are fully understood, and factor the enhanced risks into strategic decision-making. With collective consultation obligations expanding and penalties increasing, early legal advice will be critical in navigating workforce change safely and effectively.
How Can We Help?
At Harding Evans, our specialist employment law team helps employers manage workforce change compliantly and strategically. We advise organisations across Wales and the UK on collective redundancy consultation, risk management, and preparing for reforms under the Employment Rights Bill.
If you need tailored guidance on navigating these changes, get in touch today on 01633 244233 or email wilded@hevans.com.
