What is changing?
Collective consultation will be required if the employer proposes 20 or more redundancies at one establishment, or some other threshold test (which will involve redundancies across the entity as a whole). The threshold test will be set out in secondary legislation (yet to be published).
Protective awards (for failure to collectively consult) will increase to 180 days’ pay per employee (currently 90 days).
When is this changing?
The threshold test is expected to come into force in 2027 and the increase in protective awards is expected from April 2026.
How can I prepare?
- Review Redundancy Policies and Contracts
- They will need to reflect the new consultation triggers.
- Identify any terms that could be affected by other thresholds.
- Update Consultation Procedures
- Prepare to consult across multiple sites, not just single locations.
- Develop a centralised tracking system for redundancy numbers across the business.
- Strengthen HR1 Compliance
- HR teams will need to receive training to recognise when the new threshold is met (although we are waiting for clarification on the new threshold test).
- Training
- Train managers and HR teams so they understand the new consultation duties, timelines, and risks.
- Include fire and rehire scenarios in collective consultation planning.
- Engage Legal and HR teams
- Stay informed on developments relating to the ERA