UK collective redundancy reform: widening the consultation net

Large and multi-site employers face a broader collective consultation net, as the Government consults on a new organisation wide threshold, favouring a single fixed number of dismissals.

Currently, employers proposing to dismiss 20 or more employees as redundant at a single establishment within 90 days must consult with affected employees’ representatives and notify the Secretary of State.

From 2027, the reform aims to strengthen this protection by capturing large scale, multi site redundancies that fall below the single establishment threshold. Employers will be required to consult and notify the Secretary of State where either the establishment threshold is met or a “threshold number” of redundancies is proposed across their entire organisation within a 90 day period.

What is the “threshold number”?

The “threshold number” will be set by regulations following the consultation, but proposed methods are: 

• Method 1: a single fixed number of redundancies across an employer’s workforce;
• Method 2: a single percentage of the employer’s total number of employees;
• Method 3: a tiered fixed number based on workforce size at an annual 5th April snapshot date (250 redundancies for organisations with fewer than 2,499 employees; 500 redundancies for those with 2,500-9,999 employees; 750 redundancies for those with 10,000 or more employees); or
• Method 4: a combination of fixed numbers and a percentage, tiered by workforce size.

The Government has indicated a clear preference for method 1, setting the organisation-wide threshold as a single fixed number, likely within the range of 250 to 1,000 redundancies, due to its simplicity and certainty. A tiered alternative (method 3) remains under consideration, but percentage-based options (methods 2 and 4) have already been ruled out as overly complex for employers and difficult for employees and unions to monitor.

Practical implications

Key practical points for employers include:

Wider consultation

Collective consultation and notification obligations will apply in more cases, and proposed redundancies will need to be monitored and aggregated across the workforce rather than on a site by site basis. A more holistic approach to redundancy planning will therefore be required for multi site businesses, alongside refreshed consultation policies and robust central monitoring. The proposed changes will undoubtedly require changes to HR systems and increase the administrative burden on employers.

Higher stakes for non-compliance

The financial risk of non-compliance is increasing. From 6 April 2026, the maximum protective award will double to 180 days’ pay. When combined with the potential Tribunal uplift of up to 25% for breach of a statutory code of practice and unfair dismissal risk, the cost of misjudging thresholds and consultation obligations will be materially higher. Although claims for non-compliance cannot technically be waived, employers often seek to “buy out” this risk, and buy-out expectations are therefore likely to rise where consultation is not undertaken. In practice, timely and meaningful compliance will be the safest way to manage this exposure.

Sequencing and scrutiny

The recent EAT decision in Micro Focus v Mildenhall (see our blog UK: Getting the maths right in collective redundancy exercises) has helpfully confirmed that the 20-redundancy threshold is assessed on a forward-looking basis only. This means that (unless and until the decision is overturned on appeal) employers need only assess redundancies they are proposing at that point and those reasonably anticipated over the next 90 days, rather than looking back at earlier decisions. However, tribunals will still scrutinise any sequencing that appears designed to avoid triggering consultation obligations, making careful documenting of decision-making essential. This will be equally relevant when assessing the organisation-wide threshold, which may in turn drive strategy on timing and distribution of proposed terminations.

Some flexibility in process

Statutory amendments will clarify that employers are not required to consult all appropriate representatives together or to reach the same agreement with each group, meaning consultation need not be fully centralised. The consultation paper confirms that this flexibility will only apply where both the organisation-wide and establishment thresholds are met, making early decisions on consultation structure and the timing of workforce changes essential.

Next steps

The consultation closes on 21 May 2026, with draft regulations and a draft Code of Practice on collective redundancy to follow. Employers with multi-site operations and purchasers of multi-site UK businesses should monitor developments closely and consider how the organisation wide threshold may affect future workforce planning ahead of implementation in 2027. Synergy planning on M&A transactions will need to take account of the new legal landscape.

Watch this space

The Government has also previously signalled a possible doubling of the minimum consultation period for 100 or more dismissals from 45 to 90 days (as applied pre-2013), although no further detail on this has been given. 

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