Collective consultation overhaul — 4 key steps for employers

Collective consultation is about to become significantly more expensive for employers who get it wrong. From April 2026, reforms under the Employment Rights Act 2025 will both increase the level of protective awards and widen the circumstances in which collective consultation is triggered, materially raising the risk profile of redundancy exercises. 

For many employers ­— particularly those with large or multi‑site workforces — this represents a fundamental shift in how workforce planning and restructuring decisions must be managed.

Here, Alysia Heath and Christine Hart detail what’s changing, the associated risks and how employers should prepare.

Current legal position

Under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992, employers proposing 20 or more redundancies at a single establishment within a 90‑day period are required to consult in good time with affected employees or their representatives. 

In practice, non‑compliance most commonly arises where consultation is started too late, treated as a procedural formality or conducted without genuine engagement on ways to avoid or mitigate dismissals.

Where an employer fails to comply with these obligations, employees may bring a claim at the Employment Tribunal. 

At present, the Tribunal can make a protective award of up to 90 days’ pay per affected employee. This sum is uncapped and will be paid at the employee’s actual daily rate of pay. Protective awards are among the most punitive remedies available to the Employment Tribunal and are intended to penalise employers that fail to comply with their collective consultation obligations during large‑scale redundancy exercises.

Maximum protective award to double

From 6 April 2026, the maximum protective award is set to double from 90 to 180 days’ pay under the Employment Rights Act 2025, significantly increasing the financial risk for employers undertaking redundancy exercises. 

This change alone significantly increases the financial exposure associated with defective consultation and is intended to remove any perceived commercial advantage in shortening or bypassing the consultation process altogether.

The Act will also reshape how the collective consultation threshold is triggered. Rather than applying on an establishment‑by‑establishment basis, the threshold is expected to operate across the organisation as a whole. 

The Government is currently consulting on two possible approaches (with the consultation closing on 21 May 2026):

1. A single, fixed threshold, anticipated to be in the range of 250 to 1,000 redundancies.
2. A tiered threshold model based on the number of employees in the overall organisation.
    

While the precise model is yet to be confirmed, both options represent a significant broadening of scope. The move away from an establishment‑based test means that employers will no longer be able to assess redundancy risk in isolation at individual sites. Instead, proposed dismissals will need to be aggregated across the organisation within any rolling 90‑day period. 

Increased risks for employers

The doubling of the protective award will apply to any redundancy processes that result in dismissals taking place on or after 6 April 2026. This means that any employers currently considering organisational restructures or changes to their workforce must factor in the increased financial risks of a 180-day protective award. 

Employers need to ensure that consultation is both initiated in good time and a genuinely meaningful process. Non‑compliance with collective consultation obligations is often the result of misunderstanding the procedural framework, so employers should ensure that those involved in the process are properly informed, trained and confident in the requirements.

Since the Government is still consulting on how the new organisational threshold will operate in practice, the extent of the proposal remains subject to change. Nevertheless, both options currently being considered would require employers to maintain far greater visibility of restructuring activity across the whole organisation in any rolling 90-day period.  

In practical terms, this means that proposed redundancies which might previously have fallen outside collective consultation obligations because they were confined to individual sites could now be caught once they’re aggregated across the organisation. As a result, the risk of inadvertent breaches will inevitably increase, along with the risk of more employees falling within the scope of the newly increased protective award. 

How to prepare: 4 key steps for employers

Although the final form of the changes is still subject to consultation, employers should act now to reduce exposure under the new regime.

Proactive steps to consider include:

1. Review & strengthen record-keeping practices

Ensure that you have clear documentary evidence setting out the business case for any proposed redundancies, including when meaningful consultation began and the rationale behind each stage of the process. 

Maintaining strong records will become increasingly important to help demonstrate compliance with consultancy obligations.

2. Identify & map any potential redundancies early

Spend the coming months assessing whether any potential future redundancy situations may arise under the new regime. Planning ahead is key as any delays in commencing consultation or being uncertain of the process now expose employers to far greater financial risks. 

For multi-site employers, evaluate whether potential redundancies can be brought forward ahead of the new threshold taking effect. 

3. Engage with the Government’s consultation

This is a rare opportunity for employers to have meaningful influence on where the threshold is set and how the new framework will operate in practice.

4. Stay updated & prepare now to reduce risk

Keep a close eye on the outcome of the threshold consultation once it closes on 21 May 2026 and ensure that your internal redundancy process, templates and training for relevant managers are all updated to reflect the changing landscape. 

Talk to us

Collective consultation is no longer an area where employers can afford uncertainty or informal practice. With increased awards and a broader trigger, the reforms coming into force elevate collective consultation to a board‑level risk issue. 

Employers that prepare now will be far better placed to manage future restructures and avoid the substantial financial and reputational consequences of non‑compliance.

If you have questions or need support or training, look no further. Contact our award-winning employment solicitors today by calling 0333 004 4488, emailing hello@brabners.com or completing our form.