Collective redundancy obligations currently arise where an employer proposes to make 20 or more redundancies within a 90-day period at one establishment. Different sites, stores and warehouses are generally treated as separate establishments. As a result, large-scale redundancies carried out across multiple sites may not trigger the duty to carry out collective consultation.
Many considered that this was unfair and so when the proposed Employment Rights Bill was first introduced by the Labour government, it included the complete abolition of the threshold at any one establishment. However, during consultation, significant concerns were raised and as a result the 20-employee trigger at one establishment is set to remain.
Instead, and at some point, in 2027, the ERA 2025 will introduce an additional, alternative threshold test based on the total number of redundancies across the whole business. This means that if redundancies are made throughout the UK at more than one location then collective consultation obligations will apply if more than a certain number of jobs are affected.
Last Thursday (26 February 2026), the Government launched a consultation on what this new organisation wide threshold for triggering collective redundancy obligations should be.
The Government is considering two options:
- Using a single fixed number in the range of 250 to 1000.
- Introducing a tiered system, based on the size of the employer:
| 250 redundancies for organisations with 0 to 2,499 employees. |
| 500 redundancies for those with 2,500 to 9,999 employees. |
| 750 redundancies for those with 10,000 or more employees. |
The Government’s preferred approach is the single fixed number. This does appear to be the easiest way to ensure that employers understand their obligations, and that employees and trade unions are certain when they are entitled to participate in collective redundancy consultation.
Interestingly, the thresholds are much higher than many informed commentators predicted so perhaps this is an area where Labour are listening to concerns about the impact that the raft of reforms will have on businesses and the wider economy. If you want to engage in the consultation, it can be accessed via the following link here and is open until 21 May 2026.
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lreynolds@refreshinglawltd.co.uk
Lousha Reynolds
Refreshing Law