Threshold for triggering collective redundancy obligations - TUC response
The TUC strongly welcomes the policy intent behind these measures: to reform the collective redundancy process to enable wider consultation with affected employees.
However, we urge the government to consider a far more ambitious second threshold test for collective consultation to ensure that more workers benefit from a collective voice during a redundancy process and that there is more than a token change in the number of consultations taking place.
It is widely accepted that collective consultation leads to better outcomes. We note that Acas currently tells employers that it is “good practice” to carry out collective consultation even where the current law does not require it 1 . A number of employers such as Network Rail and the UK’s largest grocery chain, Tesco, already undertake collective consultation when job losses are less than 20.
This is important because effective consultation often leads to fewer job losses. This, in turn, means less long-term “scarring” to the incomes of those affected 2 . Employers continue to benefit from the skills and experience of workers. And wider society gains as workers contribute to the economy and don’t make a greater call on social security.
The focus of the government’s reforms should be on maximising these benefits, not, as set out in the options paper, a desire to find a threshold that “balances employer and employee coverage”.
It is notable from the figures set out by the government that the lower the threshold, the bigger the net social gain from the policy. It is regrettable that the options paper doesn’t set out figures for net social gain at thresholds below 250 proposed redundancies.
As it stands, the proposals set out in the consultation paper would lead to only a small increase in the number of collective consultation processes taking place. If unamended, this would be a significant missed opportunity to improve outcomes for workers and the wider economy. It would also fail to support the broader drive in the government’s Plan to Make Work Pay to give working people a stronger collective voice.
- 1 Acas. (2026). “Consulting employees and representatives: When consultation is required.” www.acas.org.uk/consulting-employees/when-consultation-is-legally-requi…
- 2 Arulampalam, W. (9 October 2008). “Is Unemployment Really Scarring? Effects of Unemployment Experiences on Wages”, The Economic Journal, Volume 111, Issue 475
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