Collective Redundancies and Unfair Dismissal Claims

In UK employment law, redundancies and dismissals are closely regulated to protect employees from unfair treatment. Employers must follow strict legal procedures, especially when proposing mass or collective redundancies affecting many workers. Where these procedures are breached, employees may bring claims for unfair dismissal or for failure to follow collective consultation rights. This article explains both legal frameworks, how they interact, the rights of employees, and what remedies are available when employers fail to comply with the law.

What Is Redundancy?

Redundancy arises when an employer dismisses employees because:

• the business or a particular workplace is closing;
• the employer's need for employees to do certain work has reduced or ceased.

Redundancy is a potentially fair reason for dismissal under the Employment Rights Act 1996. But even if redundancy is genuine, dismissal must still be carried out fairly and in compliance with statutory procedure.

Understanding Collective Redundancies

Legal Threshold and Definition

Collective redundancy occurs when an employer proposes to dismiss as redundant 20 or more employees at a single establishment within 90 days.

The key legal obligations arise under:

• Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) - collective consultation duties; and
• Employment Rights Act 1996 (ERA) - fairness in individual dismissal procedures.

Who Must Be Consulted

If collective consultation applies, employers must consult with:

• a recognised trade union; or
• employee representatives elected for this purpose where no union exists.

Consultation must be meaningful, aimed at considering ways to:

• avoid or reduce redundancies;
• mitigate the impact on affected employees.

Consultation Timescales

Employers are legally required to notify and consult before any individual redundancy notices are given. This includes:

• at least 30 days' notice before the first dismissal if 20–99 redundancies are proposed;
• at least 45 days' notice if 100 or more redundancies are proposed.

Failure to consult does not automatically invalidate dismissals but exposes the employer to employment tribunal claims for protective awards.

The Employer's Duty to Consult Individually

Regardless of whether collective consultation is required, employers must consult individually with each employee at risk of redundancy. Individual consultation should:

• explain why redundancy is proposed;
• provide information on selection criteria;
• explore alternatives, including suitable alternative roles where available.

If the individual consultation process is flawed or absent, employees may bring an unfair dismissal claim.

Unfair Dismissal: Legal Framework

What Is Unfair Dismissal?

Unfair dismissal arises where an employee is dismissed and:

• the reason for dismissal is not a fair one recognised by law; or
• the employer fails to follow a fair procedure.

Redundancy dismissal is a potentially fair reason, but it can still be unfair if proper procedures are not followed or if the employer cannot demonstrate a genuine redundancy situation.

Qualification for Claim

Currently, to bring a claim for ordinary unfair dismissal at a tribunal an employee must have at least two years' continuous service at the date of dismissal.

However, changes proposed in the UK Government's Employment Rights Bill indicate that protections will begin at six months' service from 1 January 2027.

Some dismissals are automatically unfair regardless of service length - for example, dismissal related to pregnancy, family-related rights, or trade union membership.

Remedies for Collective Redundancy and Unfair Dismissal Claims

Protective Awards

A protective award is compensation awarded by a tribunal where an employer fails to comply with its collective consultation obligations. The award is typically based on up to 90 days' pay per affected employee, although government consultations seek to increase or remove caps in future reforms.

Key points about protective awards:

• There is no service requirement - even employees with short service can claim;
• Claims must be lodged within three months less one day from the date of the last dismissal in the collective exercise.

Protective awards aim to penalise employers and compensate employees for the loss of their statutory consultation rights.

Compensation for Unfair Dismissal

If an employment tribunal finds that a redundancy dismissal was unfair, remedies may include:

• Reinstatement - returning the employee to their former job;
• Re‑engagement - offering a similar job with the same employer;
• Compensation - financial awards based on loss of earnings, subject to statutory limits (which the Government intends to remove under new legislation).

Claims must typically be presented to a tribunal within three months of dismissal, and early conciliation with Acas must be pursued first.

Practical Context and Examples

Scenario 1: Collective Redundancies Without Consultation

A business proposes to make 25 employees redundant at one site within 90 days but does not consult with employee representatives. Affected staff may bring a claim for a protective award and for unfair dismissal if individual consultation was also inadequate.

Scenario 2: Fair Process for Individual Redundancy

A small company with 15 redundancies consults individually with every employee, explains selection criteria clearly, and explores redeployment. Even without collective consultation obligations, the process is likely fair, reducing risk of unfair dismissal claims.

Scenario 3: Failure to Offer Suitable Alternative Roles

An employee with sufficient service is dismissed as redundant but is not offered an available alternative role. They may claim that the dismissal was unfair for failure to consider suitable alternative employment.

Time Limits and Process for Claims

1. Early Conciliation with Acas must be sought before a tribunal claim;
2. Tribunal claim period is usually three months less one day from the effective date of termination;
3. Protective award claims also generally follow a similar time limit.

Missing time limits can result in claims being rejected by the tribunal.

Final Thoughts

Collective redundancy and unfair dismissal law in England and Wales imposes strict duties on employers to consult both collectively and individually. Collective consultation applies where 20 or more employees may be made redundant at one establishment within 90 days. Failure to meet consultation obligations can give rise to protective award claims, while failures in individual redundancies can support unfair dismissal claims. Remedies include financial awards, reinstatement, or re‑engagement. Recent and proposed reforms aim to expand protections and adjust compensation caps, reflecting ongoing developments in employment law.