How to Handle UK Collective Redundancy (20+ Employees)

Collective redundancy is one of the most heavily regulated processes in UK employment law. When a UK private limited company (Ltd) proposes to dismiss 20 or more employees at a single establishment within a 90-day period, the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA 1992) imposes specific consultation obligations, notification duties to government, and minimum timelines. This how-to walks through the process step by step, with the procedural triggers and statutory hooks that determine compliance.

Step 1 — Confirm the Trigger Threshold

The collective redundancy duties under section 188 of TULRCA 1992 are triggered where an employer proposes to dismiss as redundant:

• 20 or more employees at one establishment within a period of 90 days or less

“Establishment” was clarified by USDAW v Ethel Austin Ltd (Woolworths) [2015] EUECJ C-80/14 — the unit of organisational structure to which workers are assigned, not the entire company. Multi-site businesses must count site-by-site.

Once the threshold is met:

• 20–99 employees: minimum 30-day consultation period before any dismissal takes effect
• 100+ employees: minimum 45-day consultation period (reduced from 90 days in April 2013)

Primary source: https://www.legislation.gov.uk/ukpga/1992/52/section/188

Step 2 — Define the “Pool”

Identify the group of employees from which redundancies will be selected — the selection pool. The pool definition is fact-sensitive and case law (Capita Hartshead v Byard [2012] IRLR 814) emphasises a thoughtful approach. Wrong pool definition = unfair dismissal exposure.

Step 3 — Identify Appropriate Representatives

Section 188(1B) requires consultation with “appropriate representatives”:

• Recognised trade union: consult union representatives
• No recognised union: consult elected employee representatives under section 188A

If electing representatives, the employer must:

• Set the number of representatives (proportionate)
• Set their term
• Run a fair election (silent period, secret ballot)
• Inform employees of the process

Failure to elect properly invalidates consultation and triggers protective awards.

Step 4 — Provide Section 188(4) Information

Section 188(4) of TULRCA 1992 requires the employer to provide written information to representatives before consultation begins:

• The reasons for the proposed dismissals
• Numbers and descriptions of employees proposed to be dismissed
• Total numbers and descriptions of all employees of the relevant description at the establishment
• Proposed method of selection
• Proposed method of carrying out the dismissals (timing)
• Proposed method of calculating non-statutory redundancy payments
• Information about agency workers (s.188(4)(g) added in 2010)

Step 5 — File HR1 with the Secretary of State

Under section 193 of TULRCA 1992 and the Employment Protection (Handling of Redundancies) Regulations 2010 (SI 2010/2706), the employer must notify the Secretary of State on form HR1:

• 30 days before first dismissal for 20–99 redundancies
• 45 days before first dismissal for 100+ redundancies

HR1 is filed with the Insolvency Service Redundancy Payments Service. Failure to notify is a criminal offence punishable by an unlimited fine (post-Sentencing Act 2020).

Reference: https://www.gov.uk/redundancy-payments-service-employer-guidance

Step 6 — Conduct Meaningful Consultation

Section 188(2) of TULRCA 1992 specifies that consultation must include considering:

• Ways of avoiding the dismissals
• Reducing the numbers to be dismissed
• Mitigating the consequences of the dismissals

Consultation must be undertaken with a view to reaching agreement. It is not a tick-box. Tribunals look at:

• Whether information was provided in good time
• Whether the employer engaged with proposals from representatives
• Whether the timeframe was adequate

Average duration in practice: 4–6 weeks for 20–99; 7–10 weeks for 100+ (allowing buffer above statutory minimum).

Step 7 — Run Individual Consultation in Parallel

Collective consultation does not displace individual consultation. Each affected employee must also be:

• Informed individually of the process
• Given selection criteria
• Scored against criteria fairly
• Given an opportunity to comment on scores
• Informed of provisional selection
• Given time to suggest alternatives, raise concerns, apply for alternative roles

Step 8 — Apply Fair Selection Criteria

Selection criteria must be:

• Objective (length of service, performance scores, qualifications, attendance) — not subjective (“attitude”)
• Verifiable (evidence-based)
• Non-discriminatory under the Equality Act 2010
• Applied consistently across the pool

LIFO (Last In First Out) on its own can be indirectly age-discriminatory and is rarely safe in 2026.

Step 9 — Consider and Offer Suitable Alternative Employment

Section 138 of the Employment Rights Act 1996 preserves continuity if a suitable alternative role is offered and accepted. Consider:

• Internal vacancies across the group
• Redeployment, reduced hours, role-share
• Voluntary redundancy offers (often cost-effective)

Refusal of “suitable” alternative employment can disqualify the employee from a redundancy payment under section 141 ERA 1996.

Step 10 — Make Redundancies and Pay Statutory Amounts

Once consultation is complete:

• Issue notice of dismissal in accordance with the contract and section 86 ERA 1996 statutory minimum:
  • 1 week for under 2 years’ service
  • 1 week per year of service (max 12 weeks) for 2+ years
• Pay statutory redundancy payment under section 162 ERA 1996:
  • 1.5 × week’s pay × completed years (age 41+)
  • 1 × week’s pay × completed years (age 22–40)
  • 0.5 × week’s pay × completed years (age 18–21)
  • Capped at 20 years and £719/week (from April 2025; £730/week from April 2026)
• Maximum statutory redundancy: £21,900 (April 2026)
• Provide written statement of redundancy pay under section 165 ERA 1996

Step 11 — Issue P45 and Final Payslip

Tax PILON (payment in lieu of notice) under Finance (No.2) Act 2017 Part 9 — all PILON now subject to income tax and NICs (the PENP calculation).

Step 12 — Maintain Records

Under section 21 of the Limitation Act 1980 (and ACAS guidance), retain consultation records, HR1 receipt, scoring matrices, and individual files for 6 years. They are essential evidence in any tribunal claim.

Failure Consequences — Protective Awards

Under section 189 of TULRCA 1992, failure to consult triggers a protective award of up to 90 days’ actual pay per affected employee (capped only by the actual pay, not the statutory week’s pay cap). For a 50-employee redundancy with 4-week salaries averaging £3,000, this can mean £540,000+ in protective awards.

The Employment Rights Bill 2025 proposes to double the maximum protective award in certain circumstances and to extend the trigger by removing the “single establishment” limit, applying instead to “across the business”.

Common Mistakes — Gyoseishoshi View

RRA 2025 / ERB 2025 — Recent and Coming Changes

• Day-one unfair dismissal rights under the Employment Rights Bill 2025 — qualifying period of 2 years removed, increasing exposure for short-service redundancies
• Fire-and-rehire restricted: dismissal followed by re-engagement on worse terms is automatically unfair unless narrowly justified
• Across-business threshold for collective redundancy proposed (replacing “single establishment”)

Conclusion — Process is the Outcome

Collective redundancy in the UK is judged on process more than outcome. Tribunals readily accept that businesses need to restructure; what they punish is the failure to consult genuinely, notify on HR1, apply fair criteria, and deliver statutory entitlements correctly. The procedural choreography under TULRCA 1992 sections 188–193 leaves no room for shortcuts.

A Gyoseishoshi cannot represent UK employers in employment tribunals or file HR1 directly. Scrib🐮 produces the documentary architecture: section 188(4) information packs, employee representative election templates, selection-criteria scoring frameworks, and individual consultation correspondence sets.

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Disclaimer

Legal information, not legal advice. MmowW Scrib🐮 is operated by a licensed Gyoseishoshi (行政書士) office in Japan. We are not UK solicitors.

Sources

• TULRCA 1992: https://www.legislation.gov.uk/ukpga/1992/52/contents
• HR1 / Redundancy Payments Service: https://www.gov.uk/redundancy-payments-service-employer-guidance
• Employment Rights Act 1996: https://www.legislation.gov.uk/ukpga/1996/18/contents
• Acas redundancy guide: https://www.acas.org.uk/manage-staff-redundancies