The maximum penalty for not properly consulting about collective redundancies will double from 90 to 180 days’ pay per employee from 6 April 2026. Exactly how the new rules will apply to ongoing collective redundancy exercises is, however, unclear.
Last December, the Employment Rights Act 2025 become law. Most of the significant legal reforms contained in it will be phased in over a long period of time. Many of them will also be accompanied by transitional provisions to cater for the fact that changes might come into force during an ongoing process (such as an ongoing flexible working request or a trade union’s recognition application) or in other circumstances where ambiguity would otherwise exist over whether the old or the new rules apply (for example, do new family rights apply for babies due after a certain date, or born after a certain date, and does it matter if they are born early?). That is why transitional arrangements matter. They are supposed to provide clarity for these situations on the cusp.
Among the sweeping reforms contained in the Act are changes to the rules around collective redundancy consultation.
Under the current law, employers proposing 20 or more redundancies at one establishment within a period of 90 days must go through a process of collective consultation before making any redundancies. If employers don’t comply, they are liable to pay a protective award of up to 90 days’ pay per employee. Unlike in other areas of employment law, there is...
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