For the first time, a single restructuring decision could pull multiple sites in a GB business into a single collective consultation. New rules are expected to take effect in 2027 and employers should start preparing now.
Key takeaways
- This is a fundamental change: The Employment Rights Act 2025 (ERA) introduces a new organisation-wide trigger for collective redundancy consultation, meaning multi-site employers will no longer be able to avoid the regime just by keeping redundancy numbers below 20 at any one establishment.
- The precise multi-site trigger threshold is to be confirmed: The Government's lead proposal is a single fixed number of proposed redundancies between 250 and 1,000, with an alternative considered proposal of having a tiered fixed threshold calculation based on employer size.
- The financial costs of getting it wrong have already risen: Since 6 April 2026, the maximum protective award for failing to comply has doubled from 90 to 180 gross calendar days' uncapped pay per affected employee.
- Start preparing now: The new rules are expected to take effect in 2027, but the operational work - particularly tracking redundancy proposals across sites - should be in place well before then.
Why this matters now
For multi-site employers, the practical consequence of the reform is that small scale redundancy decisions taken at different sites, for different operational reasons, may need to be consulted on as a single exercise. Under the new trigger, redundancy proposals at different sites across the employer will need to be monitored and aggregated centrally, which can be difficult where decisions are being made at the site-level by local managers and sites are not connected through joined systems.
Sectors such as retail, hospitality and leisure are likely to feel this acutely. Operating models in those sectors typically involve large numbers of locations with relatively small headcounts per site, and modest, site-by-site programmes have often remained below the existing 20-employee trigger. Under an organisation-wide threshold, that pattern will increasingly tip into collective consultation territory.
The financial implications have also changed. The maximum protective award for breach of collective consultation requirements has doubled from 90 to 180 days’ pay from 6 April 2026. The protective award is calculated on uncapped gross pay, which makes the doubling particularly significant for higher-earning workforces. For example, in a 40-employee redundancy exercise where each affected employee earns £50,000 a year, the potential maximum exposure for failure to collectively consult rises from about £493,000 under the old cap to about £986,000 under the new one.
When collective consultation obligations are triggered, an employer is also required to notify the Secretary of State of the proposed collective redundancies. Failure to do so is a criminal offence punishable by an unlimited fine. The new organisation-wide trigger extends the circumstances in which that notification obligation arises, meaning that notifications will be required in more cases than have previously been the case.
What the new rules require - and where the gaps remain
Under the existing collective redundancy framework, an employer proposing to dismiss 20 or more employees as redundant at one establishment within a 90-day period is required to collectively consult with employees or trade union representatives. In addition, as mentioned, the employer must notify the Government via an HR1 form (with a separate HR1 form for each establishment).
In practice, this has meant that redundancy programmes spread across multiple sites have, in many cases, fallen outside the regime entirely.
The ERA introduces an organisation-wide threshold sitting alongside the existing single-establishment one. Collective consultation obligations will therefore be triggered where an employer proposes to dismiss as redundant:
- 20 or more employees at one establishment; or
- at least the new threshold number of employees across different establishments within the employer's organisation.
The existing 90-day window remains unchanged. The Government is consulting on what the new organisation-wide threshold will be, and how it will be calculated. It has proposed the following options:
- Single fixed threshold (lead proposal): A single threshold number, somewhere in the range of 250 to 1,000 redundancies, applying to all employers, regardless of their size.
- Tiered fixed thresholds (secondary proposal): This approach would set a cross-establishment threshold by reference to the employer's size:
- 250 redundancies for employers with up to 2,499 employees
- 500 redundancies for employers with 2,500 to 9,999 employees
- 750 redundancies for employers with more than 10,000 employees.
If this method is adopted, employer size would be assessed against an annual snapshot date of 5 April.
- Percentage-based methods (weakest proposals): Two other trigger options would be either (i) a single percentage of the total workforce, or (ii) a percentage for smaller employers combined with a fixed number for larger employers. The Government has expressly deprioritised these proposals, not least as percentages make the calculations more complex.
Counting is done at employing entity level, not group level. This means redundancies at different sites aggregate only where the same legal entity is the employer at each site. Multi-site groups with several employing entities are therefore better placed under the new regime than those where staff are all employed through a single entity.
The new organisation-wide threshold will not extend to Northern Ireland. This means that where employer size is relevant, it will only be assessed by reference to employees in England, Wales and Scotland. Employers with a Northern Ireland presence will therefore need to think carefully about how those employees are counted, if at all, when assessing whether the new threshold has been met.
What employers should be doing now
The proposed changes have wide-ranging implications. Four key areas need attention before 2027:
The need for centralised tracking
Employers need to set up centralised systems that monitor and record redundancy proposals across all establishments on an ongoing basis. The statutory trigger turns on proposed redundancies, not when dismissals take place. HR systems are typically designed to record actual headcount changes; few track proposals as they emerge across the business.
Employers should also ensure that their tracking systems capture any internal restructurings and movements of employees between establishments, since changes to how the workforce is organised - including the reallocation of employees from one site to another - can affect how headcount is attributed across the business and, in turn, whether either of the triggers for consultation have been met.
Consultation logistics
Where multiple sites are caught by a single trigger, the logistics of running a coherent consultation across different locations and operational rationales become significantly more complex. Helpfully, the ERA expressly updates the collective consultation legislation to provide that employers are not required to consult all appropriate representatives together, nor to reach the same agreement with each of them. This preserves flexibility to run combined or separate exercises across the business.
Consider standing employee representative bodies
Larger multi-site employers without a trade union presence may also wish to consider establishing standing employee representative bodies now, rather than relying on ad hoc elections once the new trigger is engaged; doing so can materially shorten the lead time to constituting a consultation forum when redundancies later arise, and could help simplify the consultation process for multi-site redundancy situations.
Preparing for the Code of Practice
A Code of Practice on collective redundancy obligations will be the subject of a separate consultation later in 2026. The Code is likely to shape how employment tribunals assess compliance with the new regime, and employers should track its development.
If you would like more information or support on the changes being introduced by the Employment Rights Act , please get in touch with your usual Mishcon de Reya contact or with a member of the Employment team.