Collective Redundancy – Everything You Need To Know
If your employer plans to make 20 or more employees redundant within 90 days at the same location, strict legal rules apply to protect you. From minimum consultation periods to the involvement of trade unions or elected representatives, these rules ensure the process is fair.
In this guide, we explain what collective redundancy means, how the process works, and what you can do if you think the rules aren’t being followed.
What is collective redundancy?
Collective redundancy happens when your employer proposes to make 20 or more redundancies at one workplace within a 90-day period. When this happens, your employer must follow specific legal duties set out under the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).
Below is a quick summary of collective redundancy:
- Collective redundancy is one of the most highly regulated areas of UK employment law.
- If you’re facing the prospect of large-scale redundancies at your workplace, there are clear legal protections in place to ensure you are properly consulted, fairly treated, and given time to prepare.
- If your employer doesn’t follow the rules, they could face serious consequences – including protective awards of up to 90 days’ gross pay per employee and potential criminal liability.
- A protective award is compensation you can claim if your employer doesn’t follow the rules for collective redundancy consultation. It’s separate from redundancy pay and acts as a penalty for the employer’s failure to consult properly.
Why do the collective redundancy rules exist?
The collective redundancy rules are designed to give employees a voice, protect jobs where possible, and ensure fairness when large-scale job losses are proposed. The law aims to:
- Encourage open communication: Employers must consult with trade unions or elected employee representatives before making any final decisions.
- Reduce job losses: Consultation can lead to alternative solutions, such as redeployment, voluntary redundancies, or changes in working patterns, which may reduce the number of compulsory redundancies.
- Allow time to prepare: The minimum timeframes are there to help you find support and explore alternatives.
- Ensure fair treatment: While employers can restructure, they must do so responsibly and with proper regard for employees.
The collective redundancy process (before consultation can begin)
If your employer is planning large-scale redundancies, there are specific steps they must follow before the consultation officially starts:
1. Familiarising themselves with the collective redundancy rules
Your employer must check and follow the rules if they are proposing to make 20 or more redundancies at one site within 90 days.
2. Planning and preparation
Before consultation begins, your employer must prepare a business case and information about:
- Why redundancies are being proposed
- How employees will be selected
- The timetable for consultation and possible redundancies.
3. Planning and preparation
Collective consultation must involve either:
- A recognised trade union
- Elected employee representatives (if no union exists).
If elections are needed, your employer must allow time to run a fair process before consultation begins.
How does collective redundancy consultation work?
When an employer is planning large-scale redundancies, the law sets out clear rules to make sure the process is fair and transparent. Here’s what you can expect during the consultation stage.
1. Information your employer must provide
By law, your employer must give employee representatives certain written information at the start of consultation, including:
- The reasons for the redundancies
- How many people and which types of roles are affected
- The selection method being used
- How and when dismissals might take place
- Information about redundancy pay.
Your employer must also notify the Secretary of State when collective redundancies are proposed.
2. Consultation must be genuine
The consultation must be genuine and meaningful – not a tick-box exercise. Your employer must consider ways to avoid redundancies, reduce the number of dismissals, or lessen their impact. You do not have to reach agreement, but they must show a real effort to engage.
3. Minimum consultation periods
Deadlines are strict, and starting late or treating consultation as a formality can result in employment claims. Consultation should begin:
- At least 30 days before the first dismissal if 20–99 redundancies are proposed
- At least 45 days before if 100 or more redundancies are proposed.
4. Individual consultation still applies
Importantly, individual consultation must still happen with each affected employee, even where collective consultation is taking place.
What happens after the collective redundancy consultation?
The end of consultation doesn’t mean your employer’s responsibilities stop. Here’s what should happen next:
1. Final decisions and redundancy notices
Once consultation is complete and feedback has been considered, your employer must issue written redundancy notices to those affected.
2. Notice periods and redundancy pay
Once consultation is complete and feedback has been considered, your employer must issue written redundancy notices to those affected.
You are entitled to:
- Your statutory or contractual notice period
- Statutory redundancy pay if you’ve worked there at least 2 years
Make sure you receive the correct amounts and understand your entitlements.
3. Alternative roles
Your employer must actively look for suitable alternative employment and offer you any available roles. If they don’t, you may have grounds to challenge the redundancy.
4. Record keeping
Document every step of the process. These records can be vital if you later need to pursue an employment claim.
Collective redundancies and business transfers (TUPE)
If redundancies are linked to a business sale, outsourcing, or merger, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) may apply.
In these cases, both TUPE and collective redundancy rules may overlap, and your employer must follow both sets of legal requirements. The process can be complex, so it’s important to seek advice if you’re unsure of your rights.
What if the business is insolvent?
Even if your employer is insolvent, the collective redundancy rules still apply. There is no automatic exemption just because the business is struggling financially. While some steps might be harder to follow in an insolvency, the law expects employers to do as much as they reasonably can – and to keep records explaining any limitations.
Common mistakes employers make in collective redundancy
If there are mistakes in the collective redundancy process, you might have a legal claim. Here are common errors you should watch out for:
- Not recognising when collective rules apply: Employers must consult if 20+ redundancies are proposed within 90 days at a single location.
- Breaching the minimum consultation periods: The law requires at least 30 or 45 days of consultation, depending on numbers. Rushing the process can make redundancies unfair.
- Issuing redundancy notices too early: Notices can only be given after meaningful consultation has finished.
- Failing to consult trade unions or employee representatives: Consultation cannot start until a recognised trade union or elected employee representatives are in place.
- Giving limited or unclear information: Employees (or their representatives) must receive all required details in writing at the start of consultation.
- Failing to notify the Secretary of State: Employers must submit Form HR1 in advance when proposing collective redundancies. Failing to do so is a criminal offence.
- Not exploring alternatives to redundancy: Redundancy should be a last resort. Employers must consider options such as redeployment, voluntary redundancy, or changes to working hours before making job cuts.
- Skipping individual meetings: Even with collective consultation, each person must be consulted individually.
- Using selection methods that indirectly discriminate: Selection must be objective, transparent, fair, and non-discriminatory.
FAQs about collective redundancy
Here are answers to common questions employees ask about collective redundancy:
Do collective redundancy rules apply if redundancies are spread across multiple locations?
The legal threshold for collective consultation applies at one establishment, not across the whole company (unless all sites are treated as one establishment). If sites are highly integrated (same management and structure), they might be considered one establishment.
When does my employer have to start consulting me?
Your employer must start consultation as soon as redundancies are being considered, not after decisions have been made. The process should begin while plans are still at an early stage, so you have a real chance to ask questions and suggest alternatives.
How long does the consultation period need to last?
The length of the collective redundancy consultation period depends on the number of proposed redundancies. The minimum legal timeframes are:
- 20–99 redundancies: At least 30 days before the first dismissal.
- 100+ redundancies: At least 45 days before the first dismissal.
Employers should also allow additional time for elections of employee representatives if needed.
Can I challenge the redundancy process?
Yes, you can challenge the redundancy process. You may be able to bring a claim if:
- Your employer didn’t consult properly
- Your dismissal was unfair
- You were discriminated against
Do I still have to attend individual consultation if there is collective consultation?
Yes. Even if your employer consults with representatives as part of a collective process, you are still entitled to at least one individual consultation meeting. This is your opportunity to ask personal questions about your role, challenge your selection, and discuss alternatives.
Can my employer make me redundant while hiring for other roles?
Yes, but only if the roles are significantly different from yours. If there are suitable alternative roles available, your employer must offer them to you. Failure to do so could make the redundancy unfair.
What if I’m on maternity, paternity, or sick leave?
You have the same rights to consultation as other employees when on material, paternity or sick leave. Your employer must make reasonable efforts to include you – for example, by arranging virtual meetings. If you are on maternity leave, you also have priority for any suitable alternative vacancies.
Can my employer decide who goes before consultation starts?
No. Decisions should not be finalised before consultation is complete. If your employer treats the process as a formality, you may have grounds to challenge the dismissal as unfair.
Will I still get redundancy pay in a collective redundancy?
Yes. If you have at least 2 years’ continuous service, you are entitled to statutory redundancy pay and your notice period. Some employers also offer enhanced redundancy packages. Check your contract and company policy.
Do I have to accept a settlement agreement if one is offered?
No. A settlement agreement is voluntary. If you’re offered one, you should always get independent legal advice before signing, as you will be giving up your right to bring legal claims in exchange for compensation.
Contact GTE Settlement Agreement Solicitors today
If you’re facing collective redundancy and are happy with your settlement agreement, we can help. At GTE Settlement Agreement Solicitors, we’ve supported thousands of employees through the settlement agreement process and offer:
- Same-day settlement agreement advice and sign-off
- A calm, reassuring and straightforward process
- No cost to you (your employer covers our legal fees)
- Reassurance that your agreement is fair and legally sound
Call today for your free consultation on 020 7247 7190 or complete the simply enquiry form on this page.
Quick Enquiry
Nationwide Settlement Agreement Solicitors
)
This employee guide explains what redundancy consultation means, how it affects you, and what steps you can take to protect your rights.
)
In this employee guide, you’ll learn everything about ex gratia payments, including how they work in redundancy, what tax rules apply, and whether you’re entitled to one.
)