The Employment Rights Act 2025 (ERA) introduces the most sweeping reforms to UK collective redundancy law in decades. With changes taking effect across 2026 and 2027, these reforms significantly increase both the likelihood of triggering collective consultation and the financial exposure for employers who get it wrong.
In this Bellevue Brief mini‑episode, recorded on 28 January 2026, Associate Chloe Grant and Senior Consultant Leigh Edgar unpack the key changes and what they mean in practice for employers. This article summarises their discussion.
1. The Current Position: When Do Collective Consultation Duties Apply?
Under the law today, collective redundancy obligations apply when an employer is proposing to dismiss 20 or more employees within a 90‑day period at one establishment.
Key features of the current framework include:
Defining “one establishment”
This has been the subject of extensive case law. It may refer to:
- a single site (e.g., a store or depot);
- a business unit; or
- one company within a group
Remote and hybrid working patterns have added a further layer of complexity.
Consultation requirements
Where collective consultation is triggered, employers must:
- consult with a recognised trade union or elected employee representatives;
- run an election process if representatives are not already in place; and
- engage in genuine consultation, starting at the proposal stage.
Mandatory notification
Employers must notify the Secretary of State before consultation begins by submitting the HR1 form. As of late 2025, this form became digital only, a change that caught many businesses off‑guard.
Strict minimum consultation periods
If 20–99 dismissals are proposed, employers must start consultation at least 30 days before first dismissal. Where there are 100+ proposed dismissals this increases to at least 45 days.
These timelines often drive the overall restructuring timetable.
Penalties for non‑compliance
This is already a high‑risk area: failure to file an HR1 is a criminal offence, with potential fines and director liability, and protective awards for failure to consult of up to 90 days’ actual pay per affected employee.
2. What’s Changing
a. Protective Awards Will Double (April 2026)
From April 2026, the maximum protective award will double from 90 days’ actual pay to 180 days’ actual pay per employee.
Recent case law suggests tribunals typically start at the maximum protective award and reduce only for strong mitigating factors. With the maximum award doubling, the financial consequences of inadequate consultation become eye‑watering.
For employers carrying out large restructurings, timely planning, procedural fairness and documentation will become even more critically important.
b. A New “Multi‑Site” Collective consultation Trigger (Expected 2027)
Perhaps the most transformative change is the introduction of an additional trigger for collective consultation, expected to come into force in 2027.
Instead of asking only whether redundancies reach the threshold at a single establishment, the new regime will also look across the entire organisation.
This means:
- Redundancies in different stores, offices, depots or business units may need to be aggregated.
- Employers with multiple companies in a group may also see numbers combined.
- Sectors with distributed workforces, such as retail, hospitality, social care, logistics and multi‑site corporates may feel the impact most acutely.
The precise threshold (number or percentage) has not yet been defined, but the policy direction is clear:
collective consultation obligations will be engaged far more frequently than before.
And because the penalties for non‑compliance are doubling, the stakes are considerably higher.
c. Interaction With Other ERA Changes Increases Risk Further
Chloe and Leigh highlight how these reforms intersect with other elements of the ERA:
- The unfair dismissal qualifying period will reduce from two years to six months (from 1 January 2027)
- Compensation for unfair dismissal will become uncapped
This means if collective consultation is mishandled, more affected employees would be eligible to bring unfair dismissal claims, with significantly greater compensation exposure.
3. What Employers Should Be Doing Now
Although some details depend on secondary legislation, impacted businesses should already be preparing.
Here are the essential steps.
a. Map and monitor all potential redundancies across the organisation
Accurate real‑time tracking will become critical. To ensure compliance, employers should:
- record redundancies centrally, not at local site level;
- ensure HR, finance and operations communicate early and clearly; and
- identify where staggered or rolling restructures might unintentionally combine into a collective trigger.
The sequencing of restructurings will need far more strategic thought, and employers who anticipate 20+ redundancies across the next year may wish to consider whether the timing or grouping of proposals should be reconsidered, and in some cases whether any exercises should be brought forward before the new trigger bites. It will be important to consider seeking early legal advice on the risk of aggregation under the 2027 trigger.
c. Review and update redundancy policies and playbooks
Once the new thresholds are confirmed, employers will need to update redundancy and restructuring policies, HR guidance documents, internal escalation protocols and templates for consultation and communications.
d. Improve workforce planning and organisational communication
Effective cross‑team communication will be vital and in particular, businesses should adopt consistent organisation‑wide reporting tools.
e. Train HR and line managers now
Education and awareness are essential. Many consultation failures arise from local managers not realising when collective obligations are engaged; these reforms significantly increase legal risk and potential financial exposure when this happens.
So managers need to be trained to understand:
- when collective consultation is triggered (including under the new multi‑site test);
- what “genuine” consultation requires;
- the consequences of non‑compliance; and
- how to run fair, transparent processes.
With protective awards doubling and unfair dismissal liabilities increasing, employers should build greater contingency into restructuring budgets, anticipating increased financial exposure.
4. A Clear Direction of Travel And Time to Prepare
Though some details are still to be defined, the ERA’s underlying philosophy is unmistakable: large-scale redundancies should not take place without early and meaningful workplace engagement. For multi‑site organisations in particular, this marks a significant cultural and operational shift.
Need Help Preparing for the New Redundancy Regime?
Bellevue Law’s employment team can support with:
- restructuring planning;
- policy reviews;
- training for HR and managers;
- collective consultation compliance; and
- strategic workforce design.
If you’d like to discuss how we can help your organisation prepare for the ERA changes, please get in touch.
You can watch and/or listen to their episode here: Bellevue Law | Instagram | Linktree
