The maximum penalty for not properly consulting about collective redundancies will double from 90 to 180 days’ pay per employee from April 2026. This will be one of the first measures in the Employment Rights Bill to take effect – although exactly when it will bite is unclear, as our article explains.
The Employment Rights Bill is now in its final stages and expected to pass in the next few weeks, when it will become the Employment Rights Act. Among the sweeping reforms in this new legislation are some key changes to the rules around collective redundancy consultation.
Under the current law, employers proposing 20+ 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, employers are liable to pay a protective award of up to 90 days’ pay per employee. There’s no cap on the daily amount.
One of the changes made by the Bill relates to the maximum protective award. It will double from 90 to 180 days’ pay. This means that failing to meet the detailed collective consultation requirements will, in future, attract a much higher penalty. Taking shortcuts or attempting to “buy out” collective consultation requirements will become significantly riskier and more expensive.
According to the government’s roadmap for implementing the Employment Rights Bill, the doubled penalty will apply from April 2026, making it among the first measures to take effect (most...
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