The government has opened a new consultation on how collective redundancy consultation obligations will apply under the Employment Rights Act 2025 (“ERA 2025”). The proposals would move away from the current site‑based approach and introduce organisation‑wide triggers for collective consultation, a change that could materially affect when, and how often, employers are required to consult.
This consultation sits within the broader package of reforms being introduced by the ERA 2025. Employers looking to understand how these changes fit together, and what they may mean in practice, may find it helpful to explore our ERA 2025 Knowledge Hub, which brings together updates, commentary and practical insights on the forthcoming regime.
What are the current triggers?
Under the current framework, an employer is required to undertake collective consultation where it is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less.
The minimum period of consultation depends on the number of proposed redundancies:
- where 20 to 99 redundancies are proposed, consultation must last at least 30 days; and
- where 100 or more redundancies are proposed, consultation must last at least 45 days.
In addition, the employer must notify the Secretary of State of the proposed redundancies.
This approach, which focuses on dismissals at a single establishment, has meant that collective consultation obligations have not always been triggered where redundancies are spread across different sites or parts of a business.
What will change under the ERA 2025?
The ERA 2025 introduces a new organisation‑wide test for collective redundancy consultation and notification.
Once in force, employers will be required to collectively consult and notify the Secretary of State where they propose:
- 20 or more redundancies at one establishment, or
- redundancies that meet a new threshold across the employer’s organisation as a whole.
The legislation provides that this organisation‑wide threshold may be set by reference to:
- a specified number of redundancies;
- a specified percentage of the employer’s workforce; or
- another method set out in regulations.
However, the legislation also makes clear that the threshold cannot be set lower than 20.
What is the consultation seeking views on?
The consultation seeks views on how the new organisation‑wide threshold for triggering collective consultation should be set and applied in practice.
Two broad approaches are being considered:
- adopting a single fixed numerical threshold, within a range of 250 to 1,000 proposed redundancies; or
- introducing a tiered approach, where the threshold varies depending on the size of the employer’s workforce.
The government’s preferred option is to use a single fixed number within the proposed range. The rationale is that this would provide greater clarity and certainty, making it easier for employers to understand when their obligations arise, and for employees and trade unions to identify when collective consultation rights are triggered.
The consultation also asks how employers should be required to calculate their total number of employees for these purposes. Three options are being considered:
- using the average total number of employees over a specified period before a particular date;
- using the total number of employees at the point when redundancies are proposed; or
- fixing employee numbers on a regular basis (for example monthly, quarterly or annually), with that figure applying to redundancies made during the following period.
Each option raises different practical considerations, particularly for employers with fluctuating headcount or seasonal workforces.
The consultation closes on 21 May 2026, and the new organisation‑wide collective consultation trigger is expected to come into force in 2027.
What do the changes mean for employers?
The introduction of an organisation‑wide threshold has the potential to represent a significant change for many employers. In practice, it is likely to mean that collective consultation obligations will be triggered more frequently, particularly for larger organisations or those operating across multiple sites.
Employers will also need to give careful thought to how they calculate and evidence workforce numbers, which may result in additional administrative and record‑keeping requirements. While the final position will not be known until the outcome of the consultation is published, employers may wish to review their existing HR systems and data now to ensure they are well placed to respond once the new regime is confirmed.
We will continue to monitor developments closely and provide further updates as the detail and implementation timetable become clearer.
Find out more about our employment team on our website.
This is only intended to be a summary and not specific legal advice.
