Collective consultation in 2026: rules and risks

Following our recent webinar: Collective consultation in 2026: rules, risks and reforms, we provide an overview of the rules and risks surrounding collective redundancies.

This is the first of a two-part blog. The second part will outline the key changes under the Employment Rights Act 2025, and the practical steps employers can take to comply with the duty to collectively consult.

Rules

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.

As well as providing the representatives with specific information, in writing, to enable them to understand the proposals, the employer must consult on ways to avoid the dismissals, reduce the numbers of employees to be dismissed, and mitigate the consequences of the dismissals.

Consultation must be approached with an open mind, be genuine and meaningful and undertaken with a view to reaching agreement with the appropriate representatives. The purpose of the duty to consult is to ensure transparency and to afford the affected employees an opportunity to influence their employer’s proposal. To achieve those objectives, consultation must begin in ‘good time’ allowing sufficient opportunity for all relevant points to be canvassed. In addition, if the employer is proposing to dismiss:

between 20 and 99 employees, consultation must start at least 30 days before the first dismissal takes effect; and
100 or more employees, consultation must start at least 45 days before the first dismissal takes effect.

The employer must notify the Secretary of State of the proposed redundancies by way of the digital HR1 form with the potential for criminal liability and an unlimited fine if this step is missed. Individual officers of the employer can be personally liable if any failure to submit the HR1 form was with their consent or connivance or due to their neglect.

On the face of it, it should be relatively straightforward for an employer to determine if the duty applies but that’s not always the case. Employers should carefully consider the below when reaching a view on whether the duty to collectively consult is triggered:

'Proposing'	'Proposing' means more than ‘mere contemplation’ but less than an actual decision. An employer can be ‘proposing’ to make dismissals even if they are considering alternatives (e.g. selling the business).
'Redundant'	Redundancy in this context means ‘a dismissal for a reason not related to the individual concerned’. Termination of an existing contract with an offer of immediate re-engagement under a new contract to affect a change in an employee’s terms of employment will therefore be treated as a redundancy dismissal and count towards the threshold number of dismissals. So too, in most cases, will voluntary redundancies.
'Establishment'	An 'establishment' is the single entity or unit to which the employees are assigned to carry out their duties. Often, this will be each work location but this isn’t necessarily the case. Shared day-to-day management and any crossover of employees, operations and/or clients may mean that multiple workplaces comprise a single establishment. All relevant factors must be weighed in the balance including whether the unit/entity has a certain degree of permanence and stability and whether it is assigned to perform specific tasks. In practice, it can often be difficult to define the ‘establishment’: is it a single workplace/site, a department or team or the whole business? Mobile and remote workers add a layer of complexity.
'Appropriate representatives'	There are three categories of 'appropriate representatives': trade union representatives if the employer recognises a trade union in respect of the affected employees; existing employee representatives if their elected remit includes collective consultation on redundancies; or employee representatives specially elected for the collective consultation exercise. Statutory requirements apply to the election process.
'Affected employees'	‘Affected employees’ are those who may be affected by the proposed dismissals or by measures taken in connection with them. ‘Measures’ is interpreted broadly and covers any organisational step as a result of the proposed dismissals e.g. a requirement to take on residual work, changes to shift patterns or an office move.
'Within a period of 90 days or less'	The duty is triggered if there is a proposal to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less. When assessing if that threshold has been met, any employee whose proposed dismissal is already the subject of collective consultation is not counted. This means that if a collective consultation exercise is already underway and a need for further redundancies is identified, the employees subject to the first collective consultation exercise aren’t taken into account when deciding if the duty to consult is triggered in respect of the second batch of proposed redundancies. In relation to batches of redundancies, until the recent Employment Appeal Tribunal decision in Micro Focus Ltd v Mildenhall, it was generally understood that employers needed to look backwards and forwards to assess whether there were 20 or more proposed dismissals in the 90-day reference period. This created real practical difficulties for employers (and was difficult to reconcile with the requirement to disregard proposed dismissals already subject to collective consultation). However, the EAT has brought welcome clarity by confirming that whether the requisite number of dismissals is proposed within 90 days or less is a forward-looking question. There is no requirement to count retrospective proposed or actual dismissals within a rolling 90-day period. That said, the actual number of dismissals over that period will have evidential value when assessing what the employer was truly proposing at the relevant time. Employers can expect an employment tribunal to scrutinise the evidence if there have been 20 or more dismissals within a 90-day period to uncover any attempts to artificially stagger redundancies to avoid collective consultation.

Risks

The primary sanction for non-compliance is a protective award:

The amount of the protective award is what the tribunal considers to be just and equitable subject to a statutory maximum. This doubled to 180 days' gross pay (uncapped) per employee for dismissals on or after 6 April 2026.
When assessing the amount of the protective award, the tribunal will start with the maximum and reduce this in line with any mitigating factors. Tribunals have a wide discretion over what to award and will focus on the severity of the failures.
An uplift of up to 25% can be applied in dismissal and re-engagement scenarios if there has been an unreasonable failure to follow the statutory Code of Practice on Dismissal and Re-engagement.
Protective awards are punitive in nature designed to deter non-compliance by penalising employers who don’t properly fulfil their duties. An employee doesn’t need to have suffered any financial loss.
Whilst there is a limited defence of special circumstances available, it only rarely applies.

Other risks to be borne in mind include unfair dismissal claims from employees having qualifying service to bring a claim, and reputational damage as any material failure to collectively consult is likely to attract media attention.

More information

In our next blog, we will highlight the key changes on collective consultation due to come into force under the Employment Rights Act 2025.

For more information on any of the above, please contact a member of Brodies’ Employment and Immigration team. Workbox by Brodies users can access practical guidance and templates at the dedicated page on Redundancy: Collective Consultation. To arrange a short demo, please get in touch.