Collective redundancy after April 2026: Why the cost of getting it wrong has doubled

Changes introduced alongside the Employment Rights Act 2025 significantly increase the financial and legal consequences of mishandled redundancy processes. For employers, this raises the stakes of procedural discipline. For employees, it strengthens negotiating position at a critical moment.

What is a protective award?

A protective award is a form of compensation that can be ordered by an employment tribunal where an employer fails to meet its legal obligation to collectively consult employees before making redundancies.

The duty arises under the Trade Union and Labour Relations (Consolidation) Act 1992, which requires employers to consult when proposing:

• 20 or more redundancies

• Within a 90-day period

• At one establishment

Consultation must take place with appropriate employee representatives and must begin in good time, typically at least:

• 30 days before the first dismissal (for 20–99 redundancies)

• 45 days (for 100 or more redundancies)

If an employer fails to comply, a tribunal may order a protective award in favour of each affected employee.

Importantly, this is not simply compensation for financial loss. It is also intended to reflect the seriousness of the employer’s failure to follow a lawful process.

In practical terms, a fair redundancy process typically includes consultation, the use of objective selection criteria where roles are at risk, and appropriate notice. These elements sit alongside the collective consultation obligations considered in this article.

What has changed in April 2026?

From April 2026, the maximum period for which a protective award can be made has doubled.

• Previously: up to 90 days’ gross pay per employee

• Now: up to 180 days’ gross pay per employee

This change significantly increases potential liability in collective redundancy situations where consultation obligations are not properly met.

It is not a technical adjustment. It materially alters the financial exposure attached to procedural failure.

Why this matters more than it first appears

It is easy to frame this change as simply “higher compensation”. That is accurate, but incomplete. In practice, the shift does something more important:

It increases the cost of getting the process wrong

The protective award is not limited to actual financial loss. Tribunals assess:

• The seriousness of the employer’s failure

• Whether consultation was meaningful

• Whether employees were given a genuine opportunity to respond

This means that even where redundancies were commercially justified, poor process alone can lead to substantial awards.

It changes behaviour before disputes arise

Where the financial consequences are higher, employers are more likely to:

• Seek early advice

• Document decision-making more carefully

• Approach consultation as a structured exercise rather than a formality

It strengthens negotiating dynamics

Employees and their advisers are more aware of:

• The increased maximum award

• The leverage this creates in negotiations

• The importance of identifying procedural weaknesses early

The result is that disputes may be resolved earlier, but often on more informed and structured terms.

This means that understanding the structure of a fair redundancy process is no longer simply a matter of good practice, but a key factor in managing legal and financial risk.

Where employers are most at risk

In practice, risk rarely arises from a deliberate decision to ignore the law. It more often develops through:

Informal or accelerated processes

Businesses under commercial pressure may move quickly, particularly where financial viability is in question. Consultation can be treated as a procedural step rather than a genuine process.

Misunderstanding when consultation obligations begin

The duty to consult arises when redundancies are proposed, not when decisions are finalised. Starting consultation too late is a common issue.

Failure to engage appropriate representatives

Employers must consult with recognised trade unions or elected employee representatives. Failing to arrange proper representation can undermine the entire process.

Assumptions about business size

Smaller businesses sometimes assume that collective consultation rules do not apply. The threshold is based on the number of proposed redundancies, not the overall size of the organisation.

Practical guidance on consultation expectations is set out by Advisory, Conciliation and Arbitration Service (ACAS), which provides a useful reference point for how these obligations operate in real workplace settings.

A practical example

A regional business proposes to reduce its workforce by 25 employees following a downturn in demand.

Senior management identifies roles at risk and begins internal discussions. Employees are informed once a broad plan has already been developed. Consultation takes place, but in a limited and time-pressured form, with little opportunity for meaningful feedback or alternative proposals.

From a commercial perspective, the redundancies may be justified.

From a legal perspective, however, the process may be flawed.

If a tribunal concludes that consultation was inadequate, each affected employee could be awarded up to 180 days’ gross pay.

In a workforce of this size, the financial exposure can quickly become substantial, particularly when combined with redundancy payments and notice obligations.

For employees: what this means in practice

For employees facing redundancy, these changes increase the importance of understanding the process being followed.

Key considerations include:

• Whether consultation has genuinely begun before decisions are finalised

• Whether representatives have been properly appointed and involved

• Whether alternative options have been meaningfully explored

In practical terms, this may include:

• Asking how and when consultation formally began

• Requesting clarity on how representatives have been appointed

• Keeping a record of meetings and communications during the process

Where process appears limited or rushed, this may indicate potential entitlement to a protective award.

It also affects timing. Concerns about consultation are often most effectively raised during the process itself, rather than after dismissal has taken place. Claims are typically brought through the Employment Tribunal, which will assess the conduct of the employer and determine the appropriate award.

A more disciplined approach to redundancy

For employers, the practical response to these changes is not simply to be more cautious, but to be more structured.

A well-managed redundancy process typically includes:

• Early identification of whether collective consultation obligations apply

• Clear documentation of the reasons for proposed redundancies

• Proper election or recognition of employee representatives

• A genuine consultation period with scope for input and alternative proposals

• Consistent communication with affected employees

Approached in this way, consultation becomes part of a defensible and transparent decision-making process, rather than a point of vulnerability.

Discussing your situation

Redundancy situations are rarely straightforward. The legal framework is only one part of a broader set of commercial and personal considerations.

At Eddison Cogan Lawyers, we work with both employers and individuals to navigate these processes with clarity and structure, aiming to resolve issues constructively where possible and to address risk early where needed.

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Frequently asked questions

What is a protective award in redundancy?

A protective award is compensation ordered by an employment tribunal where an employer has failed to properly consult employees in a collective redundancy situation. It is awarded per employee and reflects the seriousness of the employer’s procedural failure.

How much can a protective award be after April 2026?

From April 2026, the maximum protective award is up to 180 days’ gross pay per affected employee, doubling the previous maximum of 90 days.

When does collective consultation apply?

Collective consultation obligations arise when an employer proposes 20 or more redundancies within a 90-day period at one establishment.

Is a protective award automatic?

No. A tribunal will consider the employer’s conduct and the extent of any failure to consult. The award can vary depending on the seriousness of the breach.

Can small businesses be affected?

Yes. The obligation depends on the number of proposed redundancies, not the overall size of the business. Smaller organisations can still fall within the rules.

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Further reading

For those who wish to review the underlying framework in more detail:

• The statutory provisions governing collective consultation are set out in the Trade Union and Labour Relations (Consolidation) Act 1992

• Broader reforms are introduced through the Employment Rights Act 2025

• Practical workplace guidance is available from Advisory, Conciliation and Arbitration Service (ACAS)

About the author

Christopher Eddison-Cogan

Managing Partner, Eddison Cogan Lawyers

Christopher is the Managing Partner of Eddison Cogan Lawyers and advises on complex commercial, employment and family law matters. Dual-qualified in England and Wales and Australia, he brings over two decades of experience advising business owners, investors and individuals on risk, strategy and dispute resolution.

His work in employment matters often sits at the intersection of commercial decision-making and legal process, including redundancy planning, restructuring and the management of workplace disputes. He is known for a clear, structured approach to complex situations, with a focus on achieving practical and defensible outcomes.

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The following note is included for clarity and completeness:

This article provides general information on legal developments in England and Wales as at April 2026. It is not legal advice and should not be relied upon as such. The law may change, and its application will depend on the specific circumstances of each case. Reading this article does not create a solicitor-client relationship. If you require advice on your situation, you should seek guidance from a qualified legal professional.