The Employment Rights Act 2025 (“ERA 2025”) implements notable changes and enhancements to the collective redundancy rights of employees.
Employers should be aware of these changes, how they will impact undertaking a collective redundancy process and, most notably, what can occur if the correct process is not followed. Employers should also always be mindful of the wider definition of redundancy under the Trade Union and Labour Relations (Consolidation) Act 1992.
1. What is changing?
There are two key changes to collective redundancy as part of the ERA 2025.
- The current protective award that tribunals may award an employee as compensation where an employer fails to meet its obligations under collective redundancy, is 90 days’ pay to the affected employees.
Under the ERA 2025 the maximum period of the protective award is doubled to 180 days. - Additionally, the single current threshold on requiring collective redundancy kicks in when an employer proposes to make 20 or more employees in one establishment redundant, within a period of 90 days or less.
The new act intends to add an organisation-wide threshold in addition to the single establishment threshold in order to prevent large numbers of employees from being made redundant across multiple sites or establishments without being collectively consulted, despite being part of the same organisation. Once an agreed threshold level has been determined, employers will be required to undertake collective redundancy obligations when it proposes to make redundancies which meet or exceed that threshold number across their entire organisation over a 90-day period.
2. When will these changes take place?
The doubling of the protective award will take effect from April 2026.
The changes to the collective consultation threshold are expected to take effect in 2027 following consultation in 2026 to determine the level at which the new organisational threshold will apply.
3. What does this mean for employers?
Quite simply, the risk and potential liability for employers who don’t meet their collective redundancy obligations has doubled. Therefore, the need to ensure that correct processes are followed is more important than ever.
Competent, confident and knowledgeable personnel leading the management of collective redundancy processes are a must.
Strong, clear and coherent communications within and across organisations will be imperative to ensure all obligations are met and upheld- particularly where multiple sites have separate HR functions.
4. What practical steps can employers take?
There are several steps that can provisionally take ahead of these changes, including but not limited to:
- Review and audit of current processes to identify any potential future non-compliance with new legislation.
- Training for staff responsible for carrying out collective redundancy processes.
- Developing redundancy trackers across the whole organisation to ensure all redundancies are properly documented to mitigate any risk of not following the correct procedure across offices or branches of an organisation.
5. How can B P Collins help you?
If you are in a position where you need to undertake collective redundancy processes, our employment solicitors can advise you on a step-by-step basis, taking you through the different stages to ensure your business is compliant, acting lawfully and can conclude these tricky and intricate processes in the swiftest and fairest manner possible.
We advise employers on any complaints they may face from employees during these processes, enabling them to address any concerns confidently and supported by strong processes, transparency and communication.
We also offer training to your Directors, Managers, HR representatives and whomever else may be required to undertake the responsibility of overseeing collective redundancies.
If you require advice on preparing for these changes, the employment team at B P Collins would be pleased to assist. Please email enquiries@bpcollins.co.uk or call 01753 889995.
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