When does collective consultation apply?
Collective consultation applies where an employer proposes to dismiss 20 or more employees as redundant within a period of 90 days or less (collective redundancies), there are certain legal obligations to collectively consult with appropriate representatives of the affected employees, which the employer must comply with as well as a duty to notify the Secretary of State of the proposed redundancies.
Collective consultation applies if there are proposals for at least 20 redundancies at a ‘single establishment’ which could be either an entire organisation, or a ‘distinct entity’ within an organisation.
Employers must inform and consult with any recognised trade union and in the absence of a trade union, the relevant employee representatives following a fair election process.
The affected employees are those who are affected by the proposed dismissals or by measures proposed to be taken in connection with the dismissals – the term extends beyond those immediately at risk of dismissal to include those affected by measures associated with the redundancies.
Who should be included in the consultation?
When considering employees who could be made redundant, voluntary redundancies and those the employer is redeploying or moving to alternative roles should be included in the collective consultation process.
Important changes as a result of The Employment Rights Act 2025 (ERA 2025) will introduce new protections so that employers will be required to undertake collective redundancy consultation and notification whenever they make a threshold number of redundancies across their entire organisation, namely:
- Doubling the maximum protective award that can be made by the Employment Tribunal for failure to comply with the obligation to collectively consult from 90 days’ pay to 180 days’ pay in relation to dismissals taking effect on or after 6 April 2026;
- Making changes to the threshold for collective redundancy consultation to introduce an organisation-wide threshold as an alternative to the existing threshold which applies at one establishment;
- Requiring employers to notify the Secretary of State of collective redundancies.
It is still considered good practice to collectively consult even if an employer does not have to as it can help minimise risk where the number of proposed redundancies is close to, or might reach, 20.
What is consultation?
Consultation means discussing and seeking agreement with employees on:
- ways to avoid or reduce redundancies;
- ways to reduce the impact of redundancy on affected employees.
This will involve open and transparent conversations about the redundancy process and genuine and serious consideration of alternative options to redundancy.
The process of consultation
Consultation must begin in good time and certain minimum time periods apply depending on the scale of the redundancies proposed. Where 100 or more redundancies are proposed, consultation must begin at least 45 days before the first dismissal takes effect and for less than 100 redundancies, the minimum period which must elapse is 30 days (this period may double to 90 days by the government when an employer is proposing to dismiss 100 or more employees).
Consultation will involve the provision of information on the proposals to appropriate representatives.
As a minimum, consultation must be undertaken with a view to reaching agreement on ways and means of avoiding the dismissals, reducing the number of dismissals and mitigating their consequences. Consultation may not result in an agreement being reached however, the employer must be able to establish the consultation was genuine and it tried to reach an agreement.
Where special circumstances render it not reasonably practicable to consult in good time or provide the statutory information, an employer must still take such steps towards complying with the duty to consult as are reasonably practicable.
Whilst the length of the consultation may vary, if consultation ends sooner than 30 or 45 days, the employer must not make any employees redundant before the end of the 30 or 45 days.
Breaches of the duty
A failure to comply with any obligations relating to providing information to employees or consultation can result in Employment Tribunal claim being issued for a protective award of up to 180 days’ actual gross pay (for dismissals taking effect on or after 6 April 2026) for each employee covered by the aware.
The award is not based on loss of earnings, but on the seriousness of the employer’s default and so these awards are to be regarded as a penalty for non-compliance with their obligations.
In addition, employers may also face unfair dismissal claims and they risk committing a criminal offence should an employer to whom the duty to collectively consult applies fail to notify the Secretary of State of the proposed redundancies.
Relationship between collective and individual consultation
Collective consultation does not eliminate the need to consult with individual employees, but it may, depending on the circumstances, make the employer’s obligations less onerous. An employer is obliged to act reasonably in all the circumstances, the extent to which it is required to consult both collectively and at individual level will depend on the facts. Employment Tribunal guidance on the factors to be taken into account when determining whether a particular redundancy dismissal is fair, whilst each case being considered on its own facts, would include:
- The employer seeking to give as much warning as possible of impending redundancies so as to enable the union and employees who may be affected to take early steps to inform themselves of the relevant facts, consider possible alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere; and
- Consulting the trade union as to the best means by which the desired management result can be achieved fairly and with minimal hardship to the employees as possible. Specifically, the employer will seek to agree with the criteria to be applied in selecting the employees to be made redundant and when a selection has been made, the employer will consider with the union whether the selection has been made in accordance with those criteria.
Collective consultation is not to be deemed an adequate substitute for individual consultation with affected employees over the reasons for the proposed redundancies, the selection criteria to be applied and its application to that employee, and the existence of alternative employment. Individual consultation on these issues will be central to establishing the fairness of any individual dismissal. The recommended approach during the collective consultation is for employers to seek to agree with the employee representatives a procedure for deciding on the redundancies, including provision for such individual meetings.
Ellisons’ Employment team can support employers throughout the redundancy and collective consultation process and ensure their procedures and policies remain legally compliant. If your business is considering implementing large scale redundancies or you are unsure whether collective consultation requirements may apply, please contact our Employment team for advice.
