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Background
Since being published in October 2024, the Employment Rights Bill (the Bill) has been subject to continuous debate as it makes its way through Parliament.
On 4 March 2025, the Government published its responses to consultations (which commenced at the end of 2024) with business groups and unions on key aspects of the Bill, before publishing an Amendment Paper on 5 March 2025 outlining the proposed amendments to the Bill.
Included in the amendments to the Bill were various changes relating to collective redundancy as follows:
One establishment
The original Bill proposed removing the wording ‘at one establishment’ from collective consultation obligations. If passed, this would have meant that any proposed redundancy of 20 employees or more, regardless of whether these 20 are at the same establishment or different establishments, would have triggered the requirement for a collective consultation process. This would have been particularly onerous for multi-site employers.
Following the consultation, the Government explained it will no longer remove the wording; therefore collective consultation will only be required if 20 or more redundancies are proposed at one establishment.
However, the Government does intend to introduce an additional business-wide threshold to cover redundancies across multiple establishments, but it has not yet disclosed the full details of this. There is a suggestion the threshold would be based on either a percentage of the workforce or a set number of redundancies (over 20). The Government intends to set out the full details of the collective consultation process for multiple establishment redundancies in future regulations.
In response to concerns raised around delays and complexities should employers be required to consult with employee representatives across different establishments, the Bill now includes a provision that states that, in carrying out collective consultation, the employer does not need to consult all employee representatives together or try to reach the same agreement with all of the representatives. This is particularly relevant for employers considering future redundancies across multiple sites.
Protective awards
To encourage employer compliance, the Government also confirmed an amendment to increase the cap on protective awards in collective redundancy situations, where the award for failure to collectively consult will increase from 90 days to 180 days’ pay.
This increase in the protective award, combined with the existing Tribunal power to award (up to) a 25% uplift to a protective award, could have a significant impact on employers facing claims related to alleged failures to follow the Code of Practice on Dismissal and Re-engagement in a collective redundancy situation. This could be incredibly costly for employers, and compliance in collective redundancy situations will be all the more important if the changes come into force.
The Government also consulted on introducing interim relief for employees claiming collective consultation breaches in redundancy or ‘fire and rehire’ situations. This would have meant that where a Tribunal considered a claimant was likely to succeed in their claim, it would have the power to award the claimant immediate financial remedy (usually in the form of full salary pay until the case’s conclusion). Ultimately, the Government decided against incorporating interim relief into the Bill, due to the practical complexities of implementing it, and the likely effect of putting increased pressure on an already stretched Tribunal system.
Finally, the Government has confirmed that further guidance on consultation processes for collective redundancies will be produced in due course to assist employers.
To discuss how your organisation may be impacted by the proposals, or to discuss any of the other aspects of the Employment Rights Bill, please contact Robert Forsyth.
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