Collective redundancy changes are now in force, adding to the growing list of employment law reforms introduced through the Employment Rights Bill. With further updates expected throughout 2026 and 2027, it is becoming increasingly important for employers to stay informed and ensure their processes remain compliant.
One of the most significant updates introduced in April 2026 is the increase to the maximum protective award where employers fail to meet their collective consultation obligations. This means the financial and legal risks of getting a redundancy process wrong are now much greater.
In this article, we will take a closer look at the latest collective redundancy changes, explain what has changed in practice, and outline what employers should be doing now to reduce risk and remain compliant.
Key Changes
The maximum compensation employers may have to pay for failing to follow the correct collective redundancy consultation process has increased from 90 days’ pay to 180 days’ pay per affected employee. This applies where an employer fails to properly consult when proposing 20 or more redundancies at one establishment within a 90-day period.
The collective redundancy change applies to dismissals taking effect on or after 6 April 2026.
This reinforces the importance of employers providing sufficient notice and carrying out meaningful consultation before implementing redundancies, contractual changes, or wider restructuring proposals. Failing to follow the correct process could now lead to substantially higher compensation awards, making compliance more critical than ever.
Future Changes
More employers will be required to carry out collective consultation when considering redundancies. Rather than only assessing the number of employees placed ‘at risk’ at a single location, employers will need to consider the total number of ‘at risk’ roles across all sites and locations.
The Government has also confirmed that it will carry out a further consultation to determine the threshold for redundancies that will trigger the requirement to collectively consult under these new rules.
The further collective redundancy changes are expected in 2027. We will keep you updated when changes are confirmed.
Actions to Take
With the risks and potential compensation awards increasing, employers should review their current redundancy and consultation procedures now rather than waiting until changes take effect.
Some practical steps employers should consider include:
- Reviewing redundancy policies and procedures to ensure they reflect the latest legislation
- Training managers on collective consultation obligations and fair redundancy processes
- Planning ahead before beginning any restructuring exercise or contractual changes
- Keeping accurate records of consultation meetings and communications
- Seeking HR or legal advice early where large-scale changes or redundancies are being considered
- Monitoring redundancy proposals across all business locations rather than assessing sites individually
Employers should also ensure consultation is meaningful and genuine. Employees and representatives must be given enough information, time, and opportunity to respond before decisions are finalised.
Employment Rights Bill
Following extensive debate and several amendments, the Employment Rights Act 2025 officially became law on 18 December 2025. The legislation introduces a range of reforms and updates to existing employment law, including significant changes to the Employment Rights Act 1996.
Some of the most notable changes include reforms to Statutory Sick Pay, making entitlement available to a wider group of employees. The Act also introduces changes to probation periods, aiming to prevent misuse and provide greater clarity for both employers and employees. In addition, parental leave rights are being modernised to better reflect the needs of modern families and support a healthier work-life balance.
Together, these reforms represent a significant shift towards creating a fairer and more inclusive workplace across the UK.
We have been following progress with the Employment Rights Bill closely and have created a roadmap to help you stay on track with changes. You can download your copy on our website.
Conclusion
The latest collective redundancy changes highlight the Government’s increasing focus on strengthening employee protections and ensuring employers follow fair and meaningful consultation processes.
With compensation awards now significantly higher and further reforms expected in 2027, employers cannot afford to take a reactive approach. Reviewing your procedures, training managers, and seeking support early can help reduce legal risk and ensure your business remains compliant during periods of change.
If your organisation is considering redundancies, restructuring, or contractual changes, our team at The HR Booth can support you through every stage of the process. From planning and consultation to documentation and manager guidance, we can help you navigate these changes confidently and compliantly.
