Employment Rights Bill

The Employment Rights Bill will amend the current rules for when the need to collectively consult arises and increase the potential penalties for a failure to do so.

Currently, employers proposing to make 20 or more people redundant ‘at one establishment’ within a 90-day period, it must consult with appropriate employee representatives and provide notification at least 30 days before the first redundancy takes effect. If the employer is proposing to make 100 or more people redundant, the employer must provide the notification at least 45 days before the first redundancy takes effect.

The Bill, as initially drafted, proposed that the collective consultation obligations should apply regardless of whether the redundancies are taking place ‘at one establishment’ or not. This would have had significant consequences for employers, particularly large multi-site employers, potentially resulting in every proposed redundancy triggering the obligation to consult collectively.

In response to these concerns, an amendment restores the phrase ‘at one establishment’ so that the obligations will be triggered if either:

• there are 20 or more people being made redundant at one establishment, OR
• another threshold is reached, where employees are being made redundant at more than one establishment

The threshold will be defined in regulations but may be either a specified number of redundancies or an overall percentage of the workforce.

Employers will be required to notify employee representatives in writing of the total number of proposed redundancies across the business and at which establishments. But employers will not be required to consult all such representatives together, nor undertake consultation with a view to reaching the same agreement with all of them. This means that all employee representatives will be entitled to information about the proposed redundancies across the entire business, but employers will have flexibility about how the consultation process is conducted.

As regards remedies for infringement of these provisions, the maximum protective award will increase from 90 to 180 days’ gross pay per employee. The government has decided not to proceed with its original idea to extend interim relief to protective award claims. Tribunals will continue to have the discretion to vary the length of this period to reflect the seriousness of any employer breach as well as any mitigating factors.

The government intends to gather further views on strengthening the collective redundancy framework in 2025. This includes consulting on doubling the minimum consultation period when an employer is proposing to dismiss 100 or more employees from 45 to 90 days.