Employment Rights Act 2025

Collective redundancy trigger threshold - consultation

A consultation is asking for views on the level and methods by which the organisation-wide threshold for triggering collective redundancy obligations might be set, with the government evincing a clear preference for a fixed number across an organisation (regardless of size).

Section 29 of the Employment Rights Act 2025 will, once brought into force (expected in 2027), amend the collective redundancy framework so that employers must fulfil collective consultation and notification obligations whenever it is proposing to dismiss as redundant within a period of 90 days or less:

20 or more employees at one establishment, or
at least a threshold number of employees across an entire organisation (with the threshold number to be determined in regulations)

(Additionally, the maximum period of a protective award for failure to comply with both the existing and new consultation obligations will double from 90 days’ pay to 180 days’ pay from April 2026.)

The consultation (which closes on 21 May 2026) looks at how the organisation-wide threshold should be set. Four possible ways are suggested:

a fixed number across the organisation, regardless of size
variable percentage-based
fixed numbers based on employer size
variable and fixed, tiered based on the number of employees

Subsequent analysis deems the first method to be the preferred and clearest option, even though it could have a disproportionate impact on very large employers that would easily hit the given threshold. Based on this analysis, the government has ‘provisionally discarded’ methods 2 and 4 as they would not ‘sufficiently support the intended outcomes of the policy’.

This leaves two shortlisted options open for consultation: a fixed threshold set between 250 and 1,000 redundancies or a tiered threshold, which could work as follows: