Following recent consultations on fire and rehire, flexible working and trade union balloting procedures, the government has now published a consultation on the thresholds for collective redundancy.
No commencement date has yet been confirmed for the new threshold; it will take effect sometime in 2027. The consultation closes on 21 May 2026.
Collective redundancy thresholds
Currently if an employer is proposing to make 20 or more employees redundant at one establishment within a period of 90 days or less then it must comply with the collective consultation obligations set out in section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992.
The Employment Rights Act 2025 states that collective consultation will be required if there are 20 or more redundancies at one establishment but also where a threshold number of redundancies are proposed at more than one establishment (the new threshold). It is this new threshold for triggering collective consultation obligations that the consultation is looking it.
So what are the government's proposals?
Fixed number approach
The government's preference, subject to the views received in the consultation, is to use a single fixed number approach for the new threshold. This number will fall within the range of 250 to 1,000 proposed redundancies.
The government believes that having a single fixed number applying to all employers regardless of size will be the clearest method and is least likely to lead to disputes. It points out that the threshold would need to be set out at a suitably high level to avoid the largest employers being in a constant state of consultation. This may effectively exempt smaller and mid-sized employers from the organisation-wide threshold.
Tiered fixed threshold numbers based on size of employer
The government has also considered a tiered fixed approach (this is its second preference):
- 250 redundancies for organisations with up to 2,499 employees;
- 500 redundancies for those with 2,500 to 9,999 employees; and
- 750 redundancies for those with 10,000 or more employees.
The issue with this is the potential to create cliff edges and the perception of unfairness for employers at the margin of a tier, as well as the need to accurately calculate how many employees the employer has. The consultation also notes that this proposal permits the largest employers to make many more redundancies without triggering collective redundancy obligations and so this approach would provide less protection in practice than a fixed threshold at the low to medium end of the range. The government's concern is that this option may not provide adequate protections to employees.
If this approach is pursued then the government proposes that employers should calculate their employee numbers in Great Britain (not Northern Ireland) against a snapshot date annually, taken on 5 April to align with the beginning of the financial year.
Other options
Other possible options are explored in the consultation:
- A variable percentage-based threshold based on the size of the employer. This would involve a headcount calculation as discussed above. The downside to this option is the potential complexity in calculating the percentage. Another issue is the possibility that the largest employers would potentially be exempted from the organisation-wide threshold in many scenarios.
- A combined variable and fixed threshold. If an employer employs fewer than a certain number of employees, collective redundancy consultation would be triggered if it planned to make a set percentage of them redundant. Again there is the potential complexity in calculating the percentage, and employers may find it more difficult to understand when the obligations to collectively consult apply.
Practical points
We don’t know yet which approach the government will take, but it's clear that its preference is for one of the simpler options.
- The new threshold will impact on employers who operate from more than one site; this means that more redundancies are likely to fall within the collective consultation regime going forwards.
- Large employers will need to be aware that the new threshold is likely to kick in if they are making lots of small scale redundancies across multiple sites.
- It follows that employees employed in small sites will have the right to be included in large scale collective redundancy consultations.
- Check the terms of reference of your employee forum (if you have one) to see if it covers collective consultation. If not then make sure that it does, and if you don't have an employee forum think about putting one in place.
- Give thought to how you will handle redundancies across multiple sites.
- And finally, remember how important it is to comply with collective consultation obligations, particularly in view of the increase of the protective award from a maximum of 90 to a maximum of 180 days' pay which takes effect on 6 April 2026.
If your organisation may be affected by these changes, you may wish to consider responding to the consultation before it closes on 21 May 2026. We will issue a further update once the government has published its response and confirmed the commencement date for the new threshold.
