Redundancy consultation is a legal and practical safeguard when an employer proposes to remove roles. For an SME, getting it right means discussing genuine alternatives before a final decision is taken, using fair selection criteria and involving the right representatives where collective consultation is required.
The risks have increased. Since 6 April 2026, a tribunal can make a protective award of up to 180 days’ full pay per affected employee where an employer fails to comply with collective redundancy consultation requirements. That is double the previous 90-day maximum.
This updated guide explains the five stages of a redundancy process, the collective consultation thresholds, the HR1 notification rules and the practical steps employers should take in 2026.
Stage 1: Consider alternatives to redundancy
Before proposing dismissals, identify the business reason for a potential reduction in roles and explore whether redundancies can be avoided or reduced. Consultation should happen while there is still a genuine opportunity for staff to influence the decision, rather than after the outcome has been settled.
- Vacancy management: consider holding or slowing recruitment, and whether existing vacancies could be offered to affected employees.
- Redeployment: assess suitable alternative roles, including training that might make a move possible.
- Working arrangements: explore temporary reduced hours or voluntary changes where they can lawfully be agreed.
- Voluntary redundancy: invite expressions of interest where appropriate, but continue to assess selection and collective consultation obligations.
- Business reorganisation: examine whether work can be shared or costs reduced without compulsory dismissals.
Each alternative has different contractual and commercial implications. Employers should not unilaterally cut pay, hours or benefits without considering the terms of employment and applicable legal rights.
The Acas collective consultation guidance explains that consultation is intended to find ways to avoid dismissals, reduce their number and limit their consequences.
Stage 2: Identify affected roles and selection
Work out which roles are genuinely at risk and the appropriate selection pool. It is not always fair to select a single individual simply because their manager believes they are the least useful employee. The correct pool depends on the work performed and how interchangeable roles are.
Where selection is needed, explain the criteria in advance and apply them consistently. Skills, relevant qualifications and objectively assessed performance may be appropriate. Unexplained subjective ratings or attendance scores that penalise disability-related absence or pregnancy can create discrimination risks.
| Selection issue | Approach to consider |
|---|---|
| Pool | Identify which employees perform similar or interchangeable work |
| Criteria | Use job-related measures that can be supported by evidence |
| Scoring | Record reasons for scores and provide a fair opportunity to challenge them |
| Protected circumstances | Consider maternity protections, disability adjustments and discrimination risks |
| Alternatives | Explore suitable vacancies and redeployment before making dismissals final |
Redundancy selection and consultation overlap. A provisional score may be shared for discussion, but it should not be treated as unchallengeable. Employees must have a meaningful chance to comment on the scoring and the proposals.
Stage 3: Hold redundancy consultations
A redundancy consultation should explain the proposals, listen to alternative suggestions and consider how to reduce the impact on affected employees. Employers should consult individuals even where collective consultation rules are not triggered.
Collective consultation is legally required where an employer proposes to make 20 or more employees redundant at one establishment within a period of 90 days or less. The term ‘establishment’ is a legal concept that may not simply mean the whole company. Acas sets out the current threshold.
| Proposed redundancies at one establishment within 90 days | Collective consultation timing |
|---|---|
| Fewer than 20 | No general statutory collective consultation duty, but individual consultation and a fair process remain important |
| 20 to 99 | Begin collective consultation at least 30 days before the first proposed dismissal takes effect |
| 100 or more | Begin collective consultation at least 45 days before the first proposed dismissal takes effect |
Where required, consult a recognised trade union or appropriately elected employee representatives. If there is no recognised union or suitable existing representation, the employer must arrange for representatives to be elected. Direct meetings with every employee do not replace the statutory representative process.
The written information given to representatives should explain the reasons for the proposals, categories and numbers affected, selection methods, the proposed process and how redundancy payments will be calculated. Details of agency workers must also be provided as required.
The statutory minimum of 30 or 45 days is not a deadline for a rushed consultation. There is no fixed maximum period and meaningful consultation may take longer. Acas advises beginning early enough to discuss and consider alternatives.
Consultation is not a formality
Our perspective
A common mistake is asking employees for feedback only after the company has made all its decisions. An employer should have a reasoned proposal, but it must still be capable of changing the details in response to consultation.
Good documentation records not only the meetings held but the suggestions raised, the business’s response and any modifications made. That can help demonstrate that the exercise was genuine.
Stage 4: File HR1 and confirm dismissals
Where the collective threshold is reached, the employer must notify the Redundancy Payments Service on form HR1, giving the required advance notice to the Secretary of State. This is separate from consulting representatives and cannot be replaced by telling Acas or staff about the proposals.
For 20 to 99 proposed redundancies, the HR1 should generally be received at least 30 days before the first dismissal; for 100 or more, at least 45 days. It must be submitted before issuing individual notices of dismissal, and the appropriate representatives must receive a copy. See the official HR1 employer guidance.
Failure to notify can lead to prosecution and an unlimited fine. That is a different exposure from a civil protective award for failure to consult.
- Notify the Redundancy Payments Service: submit the form fully and retain proof of receipt.
- Continue the consultation: do not use the HR1 notification as a signal that the final outcome is predetermined.
- Consider individual responses: review any representations about selection, redeployment and alternatives.
- Confirm outcomes fairly: issue appropriate dismissal notices only when the consultation stage has been properly completed.
- Check notice entitlements: provide at least the applicable statutory or contractual notice and consider lawful payment in lieu where appropriate.
Employers should also consider appealing or reviewing selection decisions and how to support staff. A correct HR1 submission will not, by itself, cure a defective consultation process.
Example: a business proposes 24 redundancies
A company employs 90 people at a single establishment and proposes 24 redundancies over two months. Management believes it can conduct 24 individual meetings and finish the process in two weeks.
Because the proposal meets the collective threshold, the business must arrange the correct representative consultation, begin it at least 30 days before the first proposed dismissal takes effect and meet the corresponding HR1 notification rules. It should also consult affected employees individually.
This is an illustrative scenario. Whether several sites amount to one establishment, or which proposed dismissals must be counted, can require specific legal analysis.
Stage 5: Calculate payments and other rights
Once a fair decision has been reached, calculate each employee’s contractual notice, accrued holiday and any applicable redundancy payment. Statutory redundancy pay depends on age, length of qualifying service and the statutory weekly pay cap in force at the relevant time.
Most employees require at least two years’ continuous service for statutory redundancy pay, but that is not the same as the eligibility rules for a protective award or discrimination claim. Employers should not assume that shorter-service employees have no rights.
Where a suitable alternative role exists, the employer may be required to offer it, and employees can have statutory trial-period rights. The precise position depends on the role and circumstances, including additional protections for certain employees.
A checklist covering individual circumstances, payments, employment terms and a recorded termination date can prevent avoidable disputes. Our employment law team for employers can advise where the process involves multiple contracts or categories of workers.
Budget for legal exposure, not just redundancy pay
Our perspective
In a large redundancy exercise, the cost of getting consultation wrong may be materially greater than managers expect. The protective award is separate from ordinary redundancy payments, and the increased 180-day maximum raises the stakes.
Before confirming a timetable, compare the operational cost of a properly run process with the potential exposure from not consulting or notifying the authorities correctly.
What changed to collective redundancy penalties in 2026?
From 6 April 2026, the maximum tribunal protective award for breach of the collective consultation duty rose from 90 to 180 days’ full pay per affected employee. This applies to qualifying dismissals taking place on or after that date. The change is confirmed by the government’s collective redundancy employer guidance and Acas’s current guidance.
The maximum does not mean every claim leads to a six-month award. A tribunal examines the circumstances and the seriousness of the failure. But employers should not regard partial or late consultation as automatically harmless.
An employee does not need two years’ service to benefit from a protective award. In addition, unfair dismissal and discrimination exposure can arise where selection or individual procedures are defective.
Further collective redundancy threshold reforms have been enacted but are subject to commencement arrangements. Employers should apply the rules in force when making their decisions and check for future changes rather than assuming proposed wider aggregation tests already apply.
Example: why the protective award matters
An employer proposes 30 redundancies at one establishment but does not consult elected or union representatives and goes straight to issuing individual dismissal letters.
If a tribunal finds that collective consultation was required and the employer did not comply, affected employees may qualify for a protective award of up to 180 days’ full pay each, depending on the facts. There may also be separate issues concerning HR1 notification and unfair selection.
The example is hypothetical, and the maximum is not a forecast of what any tribunal would order.
Redundancy consultation FAQs
Is consultation needed for fewer than 20 redundancies?
The general statutory collective consultation obligation applies at the relevant threshold of 20 or more proposed redundancies at one establishment over 90 days. Below that threshold, an employer should still consult affected individuals and follow a fair process. Contractual or collective agreements may create additional duties.
Can an employer decide on redundancies before consulting?
An employer can develop proposals and identify a potential need to reduce roles. It should not predetermine which employees will be dismissed before consultation has offered a genuine opportunity to consider alternatives and representations.
Does voluntary redundancy count towards the threshold?
Yes, the relevant count can include volunteers and people offered alternative roles where the proposal would otherwise involve redundancy. Employers should not use a series of smaller exercises to avoid consultation obligations.
How Britton and Time can help
Britton and Time’s employment law solicitors for employers can advise on redundancy planning, consultation timetables, HR1 notifications, fair selection and settlement of disputes.
If you are planning a restructuring or responding to a consultation complaint, contact our team before final decisions are made. Early advice can help reduce disruption and ensure the process is legally defensible.
We’re here to help.
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