Employment Rights Bill

The Employment Rights Bill will amend the current rules for when the need to collectively consult arises and increase the potential penalties for a failure to do so.

The Bill will extend the scope of the duty to consult by removing the 'single establishment' limitation. Where there is a proposal to make 20 or more employees redundant, this will trigger the consultation duty without needing to demonstrate they are employed at a single establishment. The effect of this will be to allow the aggregation of redundancies across establishments.

The HR1 notification trigger will also be similarly amended. Changes are also made to collective redundancy notifications for ships’ crew.

The government is consulting on lifting the cap of the protective award if the employer is found not to have properly followed the collective redundancy process. The proposal is to increase the maximum period of the protective award that a tribunal can award. The government is considering two options:

1. increasing the protective award that a tribunal can award from 90 to 180 days
2. removing the cap on the protective award entirely. This would leave it to the discretion of the tribunal to decide the penalty of the employer

The consultation also asks whether an employee who makes a claim for the protective award should be able to make an application for interim relief to the tribunal. Interim relief is a remedy available in a limited number of automatic unfair dismissal claims. In such cases, the dismissed employee may be able to apply to the tribunal for interim relief within seven days of the date of termination of employment. If granted, the tribunal will order the employer to reinstate the employee to their previous role or re-engage them in a different role pending the determination of their claim at the final hearing. If the employer is willing to reinstate or re-engage the employee then they go back to work. Where, more commonly, the employer is not willing, the tribunal will make a ‘continuation order’, meaning the employer is ordered to pay the employee as if their employment contract was still continuing, until the final hearing. Sums paid under a continuation order are irrecoverable, i.e. an employee does not have to repay the salary paid even if they ultimately lose their claim at the final hearing. Interim relief would only be awarded where the employee can show it is ‘likely’ that their claim would succeed.

Responses to this consultation (which ends on 2 December 2024) may inform changes to the Bill as it progresses through Parliament.

The government intends to gather further views on strengthening the collective redundancy framework in 2025. This includes consulting on doubling the minimum consultation period when an employer is proposing to dismiss 100 or more employees from 45 to 90 days.