A Closer Look for Employers
Author: Emily John
Key contact: Chris Aldridge
The Employment Rights Bill, introduced by the government and currently making its way through the legislative process, has revised its proposed changes to redundancy procedure. Employers need to be aware of these changes, which aim to clarify consultation obligations while increasing accountability for compliance. Below is a summary of the main changes for employers contained in the Employment Rights Bill’s Revised Redundancy Procedures.
Redundancy thresholds and the “establishment” test
Previously, employers were required to engage in statutory consultation if they proposed to dismiss 20 or more employees at a single establishment within a 90-day rolling period. An earlier version of the Bill sought to remove the “establishment” requirement, meaning dismissals of 20 or more staff across an entire organisation would trigger consultation obligations, regardless of where the redundancies occurred.
This raised concerns among employers – particularly those operating across multiple sites – about tracking unrelated redundancies and managing compliance across geographically dispersed teams. The amended Bill has reinstated the requirement for the 20 redundancies to occur at a single establishment. However, it also signals the potential for future rules requiring consultation based on total redundancies across an organisation, even if the threshold is not met at any single location.
Flexible consultation requirements
Under current law, once collective consultation is triggered, employers must consult with employee representatives “with a view to reaching agreement”. The revised Bill allows greater flexibility in how these consultations are conducted. Employers will no longer need to consult all representatives together or seek a uniform agreement across groups.
This change is intended to streamline processes, especially where localised or unrelated redundancies are taking place across different areas of the business.
Changes to the HR1 notification period
Where 100 or more employees are at risk of redundancy, employers are already required to begin consultations at least 45 days before the first dismissal. Until now, however, the HR1 Form – which notifies the government of the proposed redundancies – only needed to be submitted 30 days in advance.
The amended Bill aligns this with the consultation period, requiring employers to file the HR1 Form at least 45 days before the first dismissal occurs.
Increased protective awards for non-compliance
A significant change introduced by the amended Bill is the doubling of the maximum protective award. Previously capped at 90 days’ pay per affected employee, the maximum has now increased to 180 days.
This is intended to act as a strong deterrent against non-compliance with consultation requirements. However, it’s worth noting that many such awards are made against insolvent employers, who may be unable to pay the penalties regardless of their size.
These changes bring both clarity and stricter enforcement to redundancy consultation obligations. Employers should review their redundancy procedures to ensure they align with the amended requirements.
If you need to seek any further advice regarding the Employment Rights Bill’s Revised Redundancy Procedures, please contact a member of our Employment team.
