Category: Collective Redundancy

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Collective Redundancy Employment Law Employment Rights Act 2025 Lousha Reynolds Redundancy

Consultation launched on the threshold for triggering collective redundancy obligations

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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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Lousha Reynolds
Refreshing Law

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Anna Denton-Jones Collective Redundancy Employment Law Employment Rights Act 1996 Redundancy Without Prejudice

Reminder about redundancy consultation

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You’ve probably got under your belt that consultation is key in terms of redundancy exercises. A recent case reminds us of quite how important it is. There’s been a trend in recent years of people trying to short cut the processes, undertaking some kind of assessment exercise, scoring people and taking that information to the lowest scoring individuals, perhaps in an effort to reduce the destabilising effect of pool situations, where a group of people is being placed at risk of redundancy together and have to wait while the process is followed to understand whether or not they are safe.

I’ve always felt that this was a risky approach and this was confirmed in the recent case of Mr Joseph De Bank Haycocks v ADP RPO UK Ltd.

In this case, the claimant and the wider workforce were not consulted about the redundancy proposals before the pooling and scoring took place. The criteria for selection and the claimant’s own scores were not provided to him before his dismissal. However, he appealed and was later provided with this information.

The Employment Appeal Tribunal found that a failure to consult at a formative stage meant that the dismissal was unfair. The appeal stage had corrected the flaw in the earlier process, when it came to providing his scores, but that did not correct the flaw with regards failing to consult. The EAT helpfully reviewed all of the authorities in this area and set out the following guiding principles for fair redundancy consultation:The employer will normally warn and consult either the employees affected or their representatives on their behalf.

A fair consultation occurs when proposals are at a formative stage (my emphasis added) and where the employee is given adequate information and adequate time to respond along with conscientious consideration being given to that response.

In consultation, the purpose is to avoid dismissal and reduce the impact of redundancies (again my emphasis added) so skipping ahead like this employer had, denied that opportunity entirely.

The redundancy process must be viewed as a whole and so it is right that an appeal may correct an earlier failing. This reiterates the importance of appeals. Again there seems to have been a trend in recent years of employers neglecting to offer this stage.

It’s a question of fact and degree as to whether the consultation is adequate. It won’t automatically make a dismissal unfair that there is a lack of consultation in a particular respect, and in terms of particular aspects of consultation, such as the provision of scoring, isn’t an essential ingredient to a fair process. However, the Tribunal is going to be looking at the consultation in the round, given that meaningful consultation is about information being provided and views listened to, prior to decisions being made. If an employer has skipped any of those things then it may cause problems.

It’s also worth noting that the EAT commented that whether or not it is reasonable to show an employee the scores of others in a pool will be case specific. Our advice would normally be to show the individual their own personal scores and let them know where they fall in terms of the range of scores given to others. For example, you might say “you scored bottom of 30, those potentially safe from selection scored between 60 and 75”. This then enables the individual to understand the context as to where they fit and how far apart they are from others in terms of scoring. Obviously this would be most important to individuals where scoring is very very close.

You may need to consider in your redundancy selection process, what tie-breakers are used if people do score the same.

Anna Denton-Jones
Refreshing Law

 

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Anna Denton-Jones Collective Redundancy Communication Employment Law Employment Rights Act 1996 Redundancy Settlement Agreements Video

Video | Settlement Agreements — An employer’s contribution to fees

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Our latest video is available to view on the Refreshing Law YouTube channel — please click here to watch Anna discussing the various issues around an employer’s contribution towards an employee’s legal fees when negotiating Settlement Agreements.

Anna Denton-Jones
Refreshing Law

 

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Anna Denton-Jones Collective Redundancy Employment Contract Employment Law Employment Rights Act 1996 Redundancy Settlement Agreements Video

Video | Negotiating a Settlement Agreement (Employee)

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Our latest video is available to view on the Refreshing Law YouTube channel — please click here to watch Anna discussing and offering her top tips on negotiating Settlement Agreements from the perspective of an employee.

Anna Denton-Jones
Refreshing Law

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Anna Denton-Jones Articles Collective Redundancy Compensation Dismissal Employment Law Employment Rights Act 1996 HR Notice Periods Redundancy Unfair Dismissal

Things to know when dismissing a member of staff

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The main risks

Anyone sacking a member of their staff faces three main types of potential push back by their ex member of staff. Firstly, the employee may claim they have not received the correct notice pay or other sums owed to them, secondly, they may claim unfair dismissal, once they have 2 years’ service and thirdly, they may claim discrimination.

Unfair dismissal claims are capped at 1 years’ salary or £74,200 compensatory award and a further basic award of up to £13,500 – depending on financial losses of the employee but discrimination awards are uncapped and may include damages for injury to feelings up to £36,000. That said, it is important to note that average awards are much less – between £4-5,000 for unfair dismissal and £12,000 for discrimination.

So how can you protect yourself?

Key advice is: Put yourself in the employee’s shoes and think about how you would want to be treated. If you follow that commonsense rule you shouldn’t go too far wrong eg:- you are likely to investigate the situation thoroughly, listen to all sides including the employee before making a decision and not jump to conclusions. Canny employers draft a provision into the contract of employment enabling them to suspend an employee pending an investigation – this protects the business for example, a disgruntled employee cannot then contact customers or destroy computer evidence relevant to the investigation.

Follow a procedure – for unfair dismissal purposes you have to show that not only did you have a good reason to dismiss (such as the person being incapable of doing their job or guilty of misconduct) but you have to show that you have acted “fairly and reasonably in all the circumstances”. This certainly means following the basic steps outlined above but the ACAS Code of Practice on Discipline and Grievance should be the employers’ touchstone here – Employment Tribunals judge you by this standard and expect you to be familiar with it – it also contains handy flowcharts.

Whilst employees are entitled to bring a companion along to a meeting in which they are dismissed (a colleague or trade union official) you may also want to take a witness along. This person could help you take notes of the meeting but is also there to protect you as they can confirm you acted fairly if challenged.

So where do people tend to go wrong?

The most common mistakes are:

  • Inconsistency of decisions – dismissing for something that the last person who did it just had a warning for – this is unfair. If you want to distinguish between cases you have to be able to justify it on reasonable grounds such as the length of service and previous good record of the employee given the warning compared to the one that was dismissed.
  • Failure to investigate properly – an employer has to have a reasonable belief based on the evidence before them that an employee is guilty of misconduct. Even if an employee denies something outright if you have reasonable grounds to believe they were involved or did do something – you don’t need cast iron proof that they did, unlike criminal law.
  • Dismissing someone for poor attendance record when they have a medical condition such as depression which could qualify as a disability under the disability discrimination legislation. The employee then claims not enough was done to accommodate their medical position.
  • Pre-preparing letters of dismissal and presenting them to the employee at the end of the meeting – this makes your decision look pre-judged and will result in the dismissal being unfair. You must keep an open mind – there could be a reasonable explanation behind the situation as it appears to you.
  • Decision-makers taking account of matters which are not discussed in the disciplinary hearing ie:- the employee doesn’t get a chance to address this evidence and so the dismissal is unfair.
  • Not having an appeal stage making the case automatically unfair or the appeal decision-maker getting involved in the case when the original decision to dismiss is made so that they are not impartial which is unfair.
  • Rushing eg:- walking someone into your room, ambushing them with an allegation, deciding they are in the wrong and dismissing them. Notice of a disciplinary hearing should be given at least 24 hours before the meeting and it often helps to “think” overnight before coming to a conclusion and confirming dismissal, even if you have known all along that is where you are heading – that does mean it could take at least 72 hours  to follow the procedure but it is worth investing the time upfront to protect you against criticism at a later stage.
  • Not giving the employee the opportunity to be accompanied by a companion – failure to do this can result in a Tribunal award of up to £900

Anna Denton-Jones
Refreshing Law