Collective Redundancy: New Protective Award Limits for 2026

If you are making 20 or more redundancies within 90 days, you have legal obligations around collective consultation. Get them wrong and an employment tribunal can award each affected employee up to 180 days' pay as compensation.

That is not a typo. From 6 April 2026, the maximum protective award doubled. It was 90 days' pay per employee. It is now 180 days.

For a business making 30 redundancies at an average salary of £30,000, a full protective award across all employees could exceed £440,000. This change makes proper collective consultation not just a legal nicety but a serious financial risk management issue.

Here is everything you need to know.

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What Is Collective Redundancy?

Collective redundancy is triggered when an employer proposes to make 20 or more employees redundant within a period of 90 days or less, all at one establishment.

It does not matter why the redundancies are happening: cost-cutting, restructuring, site closure, loss of contract. Once you cross that threshold of 20 or more proposed redundancies in a 90-day window, specific collective consultation obligations apply.

Note: it is the number of proposed redundancies that counts, not the final number. Even if you end up making fewer than 20 people redundant, if you initially proposed 20 or more, the obligations still apply.

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What Obligations Apply?

When collective redundancy is triggered, you have two key legal obligations:

1. Notify the Secretary of State

You must file an HR1 form (the advance notification of redundancies form) with the Insolvency Service. This must be submitted:

• At least 30 days before the first dismissal if you are proposing to make 20 to 99 redundancies
• At least 45 days before the first dismissal if you are proposing to make 100 or more redundancies

Failure to notify is a criminal offence. You, as an individual employer, can be fined. The HR1 form is available on GOV.UK.

2. Consult with Employee Representatives

You must consult with elected employee representatives or recognised trade union representatives. Consultation must be meaningful, which means it must begin before any decisions are finalised.

The consultation must cover:

• The reasons for the proposed redundancies
• The number and descriptions of employees who may be made redundant
• The total number of employees employed at the establishment
• The proposed selection method
• The procedure and timing for carrying out the redundancies
• The method for calculating redundancy payments (other than statutory minimums)

Consultation must last for:

• At least 30 days before the first dismissal if 20 to 99 redundancies are proposed
• At least 45 days before the first dismissal if 100 or more redundancies are proposed

These are minimum periods. There is no maximum. The obligation is to consult "with a view to reaching agreement," not just to inform.

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What Is a Protective Award?

A protective award is compensation awarded by an employment tribunal to employees when an employer has failed to comply with collective consultation obligations.

It is not awarded automatically. An employee or their representative must bring a claim to an employment tribunal. The tribunal then decides:

• Whether there was a failure to consult
• What the appropriate award is, up to the legal maximum

The award is calculated as a number of days' pay per employee. It is uncapped per day (it does not stop at a week's pay like some other tribunal awards). The number of days is what the tribunal decides, up to the maximum.

Before 6 April 2026: the maximum was 90 days' pay per affected employee. From 6 April 2026: the maximum is 180 days' pay per affected employee.

This applies to any redundancy process where the first dismissal takes place on or after 6 April 2026.

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The Cost Implications of Getting It Wrong

To understand the scale of risk, consider a practical example.

Example: A manufacturing business proposes to close a production line, making 40 employees redundant. Average salary is £28,000 per year. The business skips the formal consultation process and moves straight to issuing redundancy notices.

Under the old rules:

• Maximum protective award: 90 days' pay per employee
• Daily rate: £28,000 / 365 = £76.71
• 90 days x £76.71 = £6,904 per employee
• Total for 40 employees: £276,160

Under the new rules:

• Maximum protective award: 180 days' pay per employee
• Daily rate: £76.71
• 180 days x £76.71 = £13,808 per employee
• Total for 40 employees: £552,320

The potential liability has doubled overnight. And this is before you factor in individual unfair dismissal claims, notice pay, and legal costs.

It is worth noting that tribunals do not always award the maximum. But they regularly award the full amount where there has been no consultation at all, or where consultation was plainly a box-ticking exercise rather than a genuine process.

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What Triggers a Protective Award Claim?

An employee or their representative can bring a tribunal claim if any of the following occurred:

• You failed to notify employee representatives at all
• You failed to consult for the minimum required period (30 or 45 days)
• Your consultation was not meaningful, for example you had already decided on the outcome before consulting
• You failed to provide the required written information to representatives
• You failed to elect employee representatives when you should have

The key phrase is "meaningful consultation." Courts have consistently held that telling employees about a decision that has already been made is not consultation. Consultation must happen before the final decisions are locked in, with a genuine open mind to the points raised.

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How to Run a Proper Collective Consultation

Follow these steps to protect yourself and your business:

Step 1: Establish employee representatives

If you do not have a recognised trade union, you must hold elections so that employees can elect representatives. Give employees enough time to run a proper election before consultation begins.

Step 2: Notify the Secretary of State via HR1

Submit the HR1 form before the consultation period begins. Do not wait. File it as soon as you know you will be proposing 20 or more redundancies.

Step 3: Issue the Section 188 letter

Send a formal written notice to employee representatives containing all the required information: the reason for redundancies, the number and types of roles affected, the selection method, the proposed procedure, and the redundancy pay method.

Step 4: Hold meaningful consultation meetings

Schedule regular meetings with representatives throughout the minimum consultation period. Keep a record of every meeting: who attended, what was discussed, what the representatives said, and how you responded. This documentation is essential if a claim is made later.

Step 5: Genuinely consider what representatives say

If representatives propose alternatives to redundancy, such as reduced hours, temporary pay cuts, or redeployment, you must genuinely consider those alternatives. Dismissing them without consideration undermines the whole consultation process.

Step 6: Finalise decisions after consultation

Only after the consultation period has run, and you have genuinely considered all representations, should you issue final redundancy notices. Do not issue notices before the minimum period ends.

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What Happens If You Get It Wrong

If you fail to consult properly, each affected employee can bring a claim to an employment tribunal. They have three months from the date of dismissal to make a claim.

The tribunal can award up to 180 days' pay per employee as a protective award. This is in addition to:

• Statutory redundancy pay
• Notice pay
• Any individual unfair dismissal claim
• Legal costs (though tribunals generally do not award costs in employment cases)

There is no cap on the total award across all employees. In large-scale redundancies, this can result in multi-million-pound awards.

The award is a debt owed by the employer. If the business is insolvent, the Insolvency Service can meet some of these payments and pursue the employer (or directors) for the balance.

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Common Mistakes Employers Make

Starting consultation too late. You must start the 30 or 45-day period before the first dismissal, not before the last. If you want all dismissals completed by a certain date, work backwards from that date to calculate when consultation must start.

Treating consultation as notification. Calling a meeting to tell employees they are being made redundant is not consultation. Consultation must happen before decisions are final.

Failing to hold proper elections for representatives. If you skip the election process and consult informally, you have not met the legal requirement.

Forgetting the HR1 form. It is easy to overlook the obligation to notify the Secretary of State. Failure to do so is a criminal offence and is a separate matter from the protective award.

Not keeping records. If a claim is made, you need to be able to demonstrate that consultation happened and was genuine. No records means no evidence.

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Frequently Asked Questions

Q: We are proposing 18 redundancies. Does collective consultation apply?

No. The threshold is 20 or more redundancies at one establishment within a 90-day period. At 18, you do not have collective consultation obligations, though good practice still recommends genuine individual consultation. Note: if you make additional redundancies within 90 days that bring the total to 20 or more, the obligations will apply.

Q: Does the 30-day consultation period need to run before we tell employees they are at risk?

The two things can run concurrently. You can put employees "at risk" at the start of the consultation period. What you cannot do is issue final notices of redundancy until the consultation period has ended and you have genuinely considered what was said.

Q: We have already issued redundancy notices with a start date after 6 April 2026. Does the new 180-day maximum apply to us?

This depends on when the redundancy process started and when the first dismissal takes effect. If dismissals are effective on or after 6 April 2026 and the process did not comply with collective consultation obligations, the new higher maximum is likely to apply. Seek legal advice if you are in this position.

Q: Can we speed up the process if all employees agree?

In some circumstances, the consultation period can be shortened if there are "special circumstances" that make it not reasonably practicable to comply with the full period. This is a narrow exemption and does not simply mean the business finds the delay inconvenient. A sudden and wholly unforeseen insolvency might qualify. Cost pressures alone do not.

Q: Is the protective award on top of redundancy pay?

Yes. The protective award is separate from statutory redundancy pay, notice pay, and any contractual redundancy entitlements. An employee can receive all of these in addition to a protective award.

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Last updated: April 2026