Employers with staff spread across several sites face a major overhaul of redundancy planning after ministers confirmed the Employment Rights Bill will introduce a second, business-wide trigger for collective consultation alongside the existing “20 at one establishment” test.
Under amendments tabled in the Lords, the duty to inform and consult will fire not only when 20 or more redundancies are proposed at a single workplace, but also when an as-yet-unspecified “threshold number” of job losses is reached across the whole UK business within 90 days. The number—likely the lower of 10 per cent of head-count or 100 employees—will be set in secondary regulations later this year and cannot be lower than 20, according to the draft legislation.
Although the new aggregation test will not take effect until 2027, lawyers warn that HR teams must start counting redundancies centrally now to avoid accidental breaches. “For multi-site employers this is going to be a game-changer,” said Christopher Fisher, partner at Mayer Brown, pointing to the need for live head-count dashboards and cross-site sign-off before any local redundancy exercise proceeds.
Penalties to double from April 2026
Even before the threshold arrives, the financial stakes will jump. From 6 April 2026 the Employment Tribunal’s maximum “protective award” for failure to consult will double from 90 days to 180 days’ uncapped gross pay per affected employee. When combined with the 25 per cent uplift available under the new Code of Practice on Dismissal and Re-engagement, exposure could reach 225 days’ pay.
The government’s implementation roadmap hints the HR1 notification duty will be aligned with the business-wide test, but officials say draft regulations won’t appear until winter 2025/early 2026, when consultation on collective‐redundancy measures is scheduled.
Employers cry “perpetual consultation”
Business groups are alarmed. An expert panel convened by the CBI warned the removal of the single-establishment counting rule could mean “perpetual collective consultation” for large companies, piling cost and complexity onto already stretched HR teams. The Times reports that employers are lobbying for concessions, citing a potential £5 billion annual compliance bill across the wider package of reforms.
Unions welcome stronger voice
Trade unions, by contrast, have hailed the changes as a “common-sense” boost to workers’ rights that will bring the UK closer to European norms. The TUC said the Bill would help end situations where staff are “afraid to take a better job” for fear of losing redundancy pay or facing summary dismissal.
What happens next?
Summer/Autumn 2025: consultation on detailed threshold mechanics.
Winter 2025/early 2026: draft regulations on HR1 alignment and longer minimum consultation periods for 100+ redundancies (government is considering extending 45 days to 90 days).
6 April 2026: protective-award cap rises to 180 days.
2027: business-wide threshold and revised HR1 duties expected to commence.
Immediate action points for employers
Centralise oversight of all UK redundancy proposals and track rolling 90-day totals across sites.
Stress-test budgets against worst-case protective awards (up to 225 days’ pay).
Refresh consultation protocols so site-specific reps receive business-wide numbers, as the Bill allows parallel consultations rather than one corporate-wide forum.
Prepare comms templates that address both establishment-level and company-wide figures.
Monitor draft regulations and be ready to adjust redundancy timelines once the new threshold number is fixed.
With the Bill expected to receive Royal Assent in the autumn, the window for employers to update systems and processes is closing fast. “Ignoring the countdown is not an option,” said one HR director at a FTSE 250 manufacturer. “The cost of getting this wrong will soon be eye-watering.”
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