Collective consultation just got twice as expensive to get wrong

What does it actually cost to get a redundancy consultation wrong? Since this spring, the answer for UK employers is double what it used to be. From 6 April 2026, the maximum protective award for failing to run a proper collective consultation rose from 90 days' pay to 180 days' pay per affected employee, and the award is uncapped (business.gov.uk, updated 5 April 2026). If you are an HR director or people leader with a restructure anywhere on the horizon, that single change quietly rewrote the risk column of your plan. This guide covers what changed, when the duty applies, what the exposure now looks like in real money, and how to run a process that protects both the business and the people leaving it.

What changed in collective consultation law in April 2026?

From 6 April 2026, the maximum protective award for failing to consult collectively doubled from 90 days' pay to 180 days' uncapped pay per affected employee.

The change comes from the Employment Rights Act 2025 and applies to dismissals taking effect on or after 6 April 2026, across England, Scotland and Wales. The government's stated aim was to end a calculation some large employers had been making openly. Where the old award was cheaper than the delay of consulting, a business could treat the penalty as a line item and skip the process. Employment lawyers describe the doubling as squarely aimed at that calculated breach (Weightmans). "Streamlining", "rightsizing" and "difficult decisions" have always been cheap words. As of April, skipping the conversation behind them is not.

The scale of what is at stake was on display a fortnight before the new cap arrived. In March 2026, an employment tribunal ordered protective awards for 1,687 former employees of the collapsed contractor ISG, worth up to £5,600 each and more than £9 million in total, after the company failed to consult before making them redundant (Construction Enquirer, 26 March 2026). That bill was calculated under the old 90 day cap. The same failure today could cost twice as much.

When does collective consultation apply?

Collective consultation is legally required when an employer proposes 20 or more redundancies at one establishment within any 90 day period.

The duty sits in the Trade Union and Labour Relations (Consolidation) Act 1992, and the counting rules catch more situations than many employers expect (Acas, updated 7 April 2026). Employees who volunteer for redundancy still count towards the 20. So do people you redeploy into alternative roles. If you propose 30 redundancies and expect 15 to be redeployed, you are still over the threshold. Acas also warns against staggering dismissals into smaller batches to stay under 20, because a tribunal that concludes you did so can make a protective award anyway.

Alongside the duty to consult sits a duty to notify. You must tell the government's Redundancy Payments Service on form HR1 before issuing any notice of dismissal, at least 30 days before the first dismissal for 20 to 99 redundancies and at least 45 days before for 100 or more. Failing to notify is a criminal offence that can carry a fine.

One more change is coming. From 2027, a second trigger will aggregate proposed redundancies across your whole organisation rather than one establishment, with the government consulting on a fixed threshold of somewhere between 250 and 1,000 roles (Lewis Silkin). Multi-site employers who have never met the single-establishment test should expect to be caught by the new one.

What does a protective award actually cost now?

Up to 180 days' gross pay per affected employee, with no statutory cap on the week's pay used to calculate it.

Worked through, the numbers concentrate the mind. On a redundancy exercise affecting 30 employees averaging £25,000 a year, 90 days' pay each is roughly £185,000 of exposure. The same failure now risks around £370,000. The award is based on each employee's actual pay with no statutory cap on a week's pay, and while tribunals keep discretion to award what is just and equitable, they assess it by the seriousness of the employer's default (Bevan Brittan, 22 April 2026). Nor are these claims rare. Employment tribunals received 5,026 cases in 2022/23 where employers failed to inform and consult on redundancies, according to the Department for Business and Trade's collective redundancy factsheet. And as the ISG judgment shows, insolvency does not switch the duty off. The administrators argued the business had collapsed too quickly to consult. The tribunal still made the award.

Set against that, the cost of doing consultation properly, which is mostly time, planning and some support for the people affected, looks like what it is. The cheap option.

How do you run a collective consultation that stands up?

Start while the proposals are genuinely open, give the statutory information in writing, consult on ways to avoid redundancies rather than announcing them, and respect the minimum periods.

In practice, a defensible process has six parts.

Start before the decision is final. Consultation must begin "in good time" and while your plans are still proposals. Employment lawyers describe opening the process after the outcome has effectively been decided as one of the most common and costly errors, because it invites the claim that the consultation was a sham. Employees can usually tell. In one long-running discussion on the CIPD's own community forum, an HR professional reviewing a botched process pointed out that cutting the employee's email access during the very meeting that opened consultation was suggestive of a decision already made (CIPD Community). Tribunals draw exactly the same inference.

Get representation right. Consult a recognised trade union where there is one. Where there is not, you need properly elected employee representatives, and the election itself has rules. Appointing volunteers by email the day before does not count.

Put the statutory information in writing. Representatives are entitled to the reasons for the proposals, the numbers and descriptions of roles at risk, the proposed selection method, and how redundancy payments will be calculated.

Consult on the substance, not the delivery. The legal purpose of collective consultation is to explore ways of avoiding the redundancies, reducing their number, and mitigating their impact. If the meetings only cover logistics and timelines, that is an announcement with minutes attached, not a consultation.

Respect the clock. No dismissal can take effect until the 30 or 45 day minimum period has run, and the HR1 must be in before notices go out.

Run the individual track alongside. Collective consultation does not replace individual meetings with each person at risk. Both are needed, and the individual conversations are where fairness is usually won or lost. Our guide to redundancy consultation from the employee's side shows exactly what the process feels like to the people sitting across the table.

Compliance is the floor, not the process

Everything above keeps you out of a tribunal. It does not, by itself, make the process one your remaining staff will forgive or your leavers will speak well of.

The gap shows up in what people affected by redundancy say to strangers online. In March, a poster on a UK parenting forum's work board described being put at risk after 15 years in her role, writing that "a huge comfort blanket is being taken away" (Mumsnet, 24 March 2026). What is striking in that thread is not the distress. It is that after 15 years of service, she had never heard of outplacement support until another poster suggested she ask for it, and a third admitted being afraid to raise it at all in case it signalled she had given up on redeployment. Support her employer may well have been willing to fund was invisible to the people it was for.

That is the quiet failure mode of tick-box redundancy processes. The legal steps happen, the letters go out on time, and the people leaving are handed a phone number they never call. Meanwhile they are walking into the toughest market in years, with payrolled employment down 138,000 over the year to April 2026 (ONS, June 2026).

Doing better is not expensive. Hireable's outplacement support gives every leaver a working career partner rather than a PDF and a helpline. It rebuilds their CV so they get seen, sharpens their interviews so they get heard, and works the search with them until they get hired, at an average saving of £4,200 per placement against traditional outplacement. If you are weighing up what support to offer alongside a consultation, our plain-English guide to outplacement covers what it includes and what it costs.

Collective consultation FAQs

Do voluntary redundancies count towards the 20?

Yes. Employees who volunteer for redundancy count towards the threshold, as do employees you move into alternative roles instead of dismissing (Acas).

Can we stagger redundancies to avoid collective consultation?

You should not. If a tribunal concludes you split dismissals into smaller batches to stay under the threshold, affected employees can be awarded a protective award anyway.

Does insolvency excuse a failure to consult?

No. The March 2026 ISG ruling confirmed that administration is not in itself a special circumstance, and the tribunal ordered awards for 1,687 former staff despite the company's collapse.

What changes in 2027?

A second trigger arrives, counting proposed redundancies across your whole organisation rather than a single establishment. The threshold number will be set by regulations following the consultation that closed in May 2026.

Before the next restructure lands

The doubling of the protective award changes the arithmetic of cutting corners, but the better reason to run consultation well was always the people on the other side of it. A process that starts honestly, consults on substance and sends every leaver out with real support is cheaper than a tribunal, kinder than a helpline, and it is what your remaining team will remember when they decide whether to stay. Hireable works with employers to make the leaving part true, getting every affected employee seen, heard and hired.