Collective consultation in 2026: reforms

In the second of a two-part blog following our recent webinar: Collective consultation in 2026: rules, risks and reforms, we outline the key changes under the Employment Rights Act 2025 and practical steps employers can take to comply with the duty to collectively consult.

Statutory duty to collectively consult

If an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, they have a legal duty to collectively consult with appropriate representatives of affected employees. Read our earlier blog for an overview of the rules and risks surrounding collective redundancy consultation.

New organisation-wide threshold for collective consultation

Alongside doubling the maximum protective award from 90 to 180 days’ gross pay per employee, the Employment Rights Act 2025 will introduce a new, organisation-wide threshold for collective consultation.

The Government is concerned that collective consultation, and notification to the Secretary of State via the HR1 form, is, as it stands, not required during large scale redundancy exercises if the proposed redundancies are spread across multiple sites, each site is an establishment and less than 20 dismissals are proposed at each.

To address this the Government originally planned to remove the words ‘at one establishment’ from the existing threshold. This would have had a particular impact on large multi-site employers so, instead, a new organisation-wide threshold will be introduced to sit alongside the existing threshold. A consultation on the formulation of the alternative threshold is live and open for responses until 21 May 2026. The options being considered are:

using a single fixed number in the range of 250 to 1,000; or
a tiering system based on the number of employees:

250 redundancies for headcounts of 0-2,499
500 redundancies for headcounts of 2,500 to 9,999
750 redundancies for headcounts of 10,000 or more.

The first option is preferred as it is the easiest for employers, employees and trade unions to understand and so the least likely to create disputes which would distract from effective consultation. Views are sought on whether the preferred option should be adopted and, if so, the appropriate level of the single fixed number.

Once the alternative threshold is in force, expected to be sometime in 2027:

Employers will need to notify the Secretary of State if either of the thresholds apply using the HR1 form.
If the employees whom it is proposed to dismiss as redundant are at more than one establishment, employers will be required to provide the representatives with written details of the total number of employees of any such description employed by the employer; and details of the establishments at which those employees are employed.
There will be no requirement to consult all appropriate representatives together or to undertake consultation with a view to reaching the same agreement with all representatives.

A Code of Practice to support employers in fulfilling their duty to collectively consult will be published. A draft Code is due to be consulted on at some point this year.

Impact on employers and employees

These changes will mean that:

The Secretary of State will be notified of large-scale redundancies before they happen (as an alternative trigger for notification mirroring the new threshold will be introduced) and can intervene and support affected employees.
The obligation to collectively consult will apply in respect of more employees. From the employee perspective, this means a greater opportunity to influence employer proposals, more time in which to secure alternative employment (as the minimum consultation period will apply before the first dismissal can take effect) and a positive impact on their pay (as they should remain employed during that minimum consultation period). From the employer perspective, this may force increased transparency, heightened focus on the consideration of alternatives and higher costs, both in terms of management time and maintaining salary costs during the consultation period. It may inhibit an employer’s ability to react quickly to sudden business events such as the loss of a key client contract and, in some cases, may make insolvency more likely.

Interim relief

The Government has dropped plans to make interim relief available as a remedy to employees dismissed in breach of the collective consultation requirements. Interim relief is a mechanism by which a claimant can apply to a tribunal for an order that the employer continues to employ them/pay their salary until the final determination of their claim.

Practical steps to manage compliance

The consequences of a failure to fulfil the duty to collectively consult can be significant. Employers should consider the following actions to manage compliance:

Ensure that personnel responsible for planning and executing redundancy, restructuring and dismissal and re-engagement exercises are fully aware of the requirements of the duty to collectively consult including when it will be triggered, what it entails and the consequences of getting it wrong. They should be adequately trained and provided with sufficient guidance.
The application of the duty to consult should be carefully assessed in each situation having regard to each element of the threshold e.g. is there a proposal to dismiss as redundant 20 or more employees within 90 days at one establishment? The ‘establishment’ should be defined at the outset.
Keep records of key decisions and the rationale for these.
Prepare a plan for collective consultation including:

mapping out the implications of the proposed dismissals and who will be ‘affected employees’
determining whether an election of employee representatives will be needed and the logistics of this
the allocation of responsibilities for compliance
developing a timeline with regard to the minimum timescales factoring in working patterns, operational demands and leave commitments as appropriate.

Also, consider seeking specialist legal advice and keep a watching brief for the publication of the Government’s consultation outcome and Regulations. Identify further preparatory steps once full details are known.

More information

For more information on any of the above, please contact a member of Brodies’ Employment and Immigration team. See our timeline for details of all of the Employment Rights Act 2025 reforms.

Workbox by Brodies users can access practical guidance and templates at the dedicated page on Redundancy: Collective Consultation and information on practical steps to consider in preparing for the Employment Rights Act at Employment Rights Act: Preparatory Steps. To arrange a short demo, please get in touch.