If the Employment Rights Bill represents the biggest shake-up of legislation for the workplace in a generation, measures affecting collective redundancies lead the way in encapsulating the scale and challenge of that change. Some proposed measures in this area are already demanding preparation from HR. Other details – significant ones too – are still to be decided.
This is a live issue. One of the open questions concerns the circumstances that should trigger collective consultation among those being laid off. Not only do HR practitioners need to be considering the impact of these changes now, they also need to keep informed about how to prepare for the future.
The current picture
“Larger enterprises with robust HR functions are starting to assess the implications, but many smaller businesses are less aware of the proposed changes,” comments Matt Monette, UK country manager for HR software firm Deel.
Read more: CIPD warns of rising redundancies
Owen Morgan, managing director of HR consultancy INTOO UK and Ireland, believes that HR leaders are generally aware of what’s coming. However, even if the legislation is not due to come into effect until 2026, a ‘wait and see’ attitude will help no one. Lucinda Reader, owner of consultancy Ravello HR, is not alone in the view: “HR cannot afford to be reactive.”
“Even minor legal changes can require major operational shifts,” continues Monette. “The complexity of new processes is compounded by how high-stakes and sensitive redundancies can be. They directly affect people’s livelihoods and wellbeing, so HR teams will need to juggle navigating new regulations with maintaining a human, compassionate approach to making redundancies.”
Rising costs
Playing significantly on HR leaders’ minds is the fact that the cost of getting things wrong is about to become much more expensive. Andrew Davidson, national head of employment at the legal firm Hempsons, highlights that the penalty for inadequate collective consultation – the protective award – will increase from the current 90 days gross pay per affected employee to 180 days gross pay per affected employee.
“This is a very unwelcome development for employers, and will lead to some very high awards in successful cases,” he notes. “Tribunals start at the top of the award and only reduce it if the employer can successfully argue that it should be reduced; for example, because the failing was a technical rather than a substantive failing.”
Liz Stevens, professional support lawyer in the employment team at Birketts, adds: “It is unlikely to be financially viable for employers to forgo collective consultation, or pay lip service to the requirements, and absorb the costs of a protective award. Careful planning and properly conducted consultation in accordance with the statutory requirements will need to be factored into all large-scale redundancy exercises.”
Interestingly Stevens highlights a step down from the government in the course of drafting this legislation. At one point there was provision to make interim relief available in claims for a protective award. This has now been taken out of the legislation.
“It is difficult to see how interim relief would have worked as a remedy in these circumstances,” says Stevens, “with employers potentially being forced to re-engage large numbers of employees pending a final hearing, and employment tribunals having to manage the high burden of additional claims. This is a sensible and pragmatic decision by the government.”
Ongoing uncertainty
While the cost of non-compliance is becoming clear, what compliance actually means is not. One unresolved issue is under what circumstances collective consultation should be triggered in the first place. Under existing law, employers are required to consult with representatives of the affected employees if 20 or more redundancies are to be made at one place of work within a rolling 90-day period.
Read more: Hiring confidence at a record low, as redundancies rise
Labour’s original legislation removed the ‘single location’ part of this trigger, meaning that if a total of 20 or more redundancies occurred across multiple sites over that time frame, then consultation would be required. Pressure from business has meant that this element has been removed. But the government has signalled that there will be a new threshold in the final legislation, probably based on the total number of redundancies made.
“The government has not yet said what this number will be,” remarks David Parsons, partner in law firm Mishcon de Reya’s employment department. “It has simply promised to set it out in regulations following ‘detailed consultation with all of those with a stake in good employer-employee relations’.”
The outcome of this part of the legislation will be key for HR’s ongoing experience. Monette gives the example of the threshold for collective consultation reducing from 20 redundancies at a single site to 20 redundancies across an entire business. This would mean an organisation with smaller teams spread across multiple locations could suddenly be required to initiate a formal consultation process. “That introduces tight deadlines, the need to consult employee representatives, and careful coordination across teams and locations,” he says.
Keep an eye out
While HR needs to keep watching this space, it is also imperative it has sight over all redundancies made, so it can tell if consultation requirements are triggered: “It will be critical for employers with multiple workplaces to ensure that they have proper processes in place to track proposed redundancies across their entire business,” says Parsons.
The emphasis here is on ‘proposed’. HR needs foreknowledge of how many redundancies are about to happen, because if an organisation finds in retrospect that it has made sufficient redundancies in the required time period and has not consulted, it will run into serious problems.
This uncertainty is not easy for HR to live with: “Until the detail is finalised, it’s difficult to second guess exactly which systems and processes will be impacted,” says Morgan, “and what additional level of burden on already stretched HR professionals this will create.”
Morgan makes the point that any move that extends collective consulting – particularly across multiple sites – could prove a headache for HR. Jobs across different sites are likely to fall into different categories, making consultation complex. “A group of factory and office workers will not be aligned in terms of alternative proposals and consultation outcomes, for example,” he says. “This is likely to cause confusion.”
The resulting time taken over consultations and proposals may bring additional stress and uncertainty for all. “Extending what can be a highly uncertain and challenging period in an individual’s working life across several months risks personal wellbeing and mental health issues,” Morgan continues.
“In almost all cases, people seek certainty and clarity, particularly if the outcome is unlikely to change or if the early stages of a consultation reveal few – or no – mitigating factors.” He also notes that extending this period at a time when businesses may be dealing with other challenges could undermine confidence within the remaining workforce, and have more serious ongoing effects.
How HR can respond
In the face of such challenges, some commentators are keen that HR takes the initiative: “HR shouldn’t be afraid of collective consultation,” says Reader, “it should lead it with confidence, using it as a way to build trust, surface better ideas, and reduce risk through genuine dialogue.”
Ravello advises HR to ensure it has full visibility of redundancies across the organisation, following cross-functional developments rather than site-by-site. She further advises HR to embed themselves in strategic conversations, especially where restructuring or cost pressures are being discussed.
Consultation risk, she argues, is now a business-wide concern. HR needs to collaborate with legal, finance and operations to secure the best outcome, and ensure that the business stays compliant in everything it does.
She also advises HR leaders to educate the rest of the business on the value of collective consultation: “It’s not a barrier,” she says, “but a tool for better, fairer outcomes.
“This is the moment for HR to step into a more strategic space,” Ravello concludes, “not just managing consultation, but shaping how the business approaches change. Don’t fear it. Lead it.”
Prepare for the way ahead
Hannah Johnson, HR technical consultant for technology business AdviserPlus, offers three tips:
• Get the process right, and train your managers
Ensure redundancy and restructuring processes are consistent, transparent, and empathetic. Equip managers with the skills and confidence to communicate clearly and compassionately, reducing legal and emotional risks.
• Offer support
Support everyone involved, before, during and after. Provide mental health support and clear communication. Acknowledge the emotional toll on teams and on HR, who often carry the burden of managing these transitions.
• Use technology
Tech enables better experiences. The right tools can reduce admin, ensure consistency, and allow HR and managers to focus on people, not just processes, while maintaining compliance and improving support.
Matt Monette, UK country manager for the HR technology firm, Deel, suggests two focus points:
• Review
Audit current redundancy procedures and workforce distribution. Consider where new thresholds might apply which could require collective consultation. Internal planning and early engagement with affected teams can help speed up response times if formal consultation is triggered.
• Monitor
Legal and HR teams should monitor developments closely, so that changes can be built into policy and training well in advance.
This article was published in the May/June 2025 edition of HR magazine.
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