The rules on collective consultation are changing under the Employment Rights Bill – with a new threshold applying to trigger a collective redundancy process.
What’s changing?
Under the ERB, more employers than ever before will be required to collectively consult when considering redundancies. This is because the ERB is likely to set out that, rather than measuring the number of ‘at risk’ roles at one site, the employer must consider the number of ‘at risk’ roles across every site belonging to that employer. A new threshold to trigger collective consultation is likely to be set at either 50 or 100 ‘at risk’ roles across all sites.
Some good news – it’s unlikely that the ‘count’ when establishing the collective consultation threshold will extend to anyone outside of the company (so you won’t need to consider redundancies group wide). We don’t yet have a date for when these changes are likely to come into force.
Penalties
The maximum compensation award for failure to collectively consult is also set to double from 90 to 180 days’ pay per affected employee, along with a further 25% uplift applicable for failing to comply with the statutory Code of Practice (this uplift was introduced in January 2025). This is a total potential exposure of up to 225 days’ pay per affected employee for getting this wrong.
Practical steps
Timing – if you’re thinking of making redundancies, it may be sensible to ensure those processes are completed before the Bill kicks in.
Clear job titles – we often see employees with different titles doing the same role and vice versa. This adds unnecessary complexity to a consultation process. Reviewing job tiles and roles to ensure they accurately reflect reality will be time well spent and simplify any subsequent redundancy process.
Train people teams – its likely more employers are going to need to collectively consult as a result of these changes. If there’s the possibility that collective consultation is on the horizon, let us know and we can support with training for your people team. We also offer annual training subscriptions for your team so that you don’t have to spend hours sifting different sources for information and then building the training materials yourself – we do the hard work for you. Click here for information.
Get in touch if you’d like to chat with about anything we’ve covered in this update.
This update is accurate on the date it was published but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.
