Collective redundancies : from April 2026, the protective award is set to double — and SMEs should take notice

Collective redundancies award changes april 2026, What SME’s need to know to 

If redundancies might be on the cards in 2026, there’s a change coming that’s worth treating as a proper business risk. Not because it’s dramatic or headline-grabbing — but because it increases the cost of getting the process wrong.

From 6 April 2026, the maximum protective award linked to failures in collective redundancies  consultation is expected to rise from 90 days’ pay to 180 days’ pay, for each affected employee.

What is a protective award, in plain English?

A protective award is what a tribunal can order when an employer hasn’t properly followed the rules on informing and consulting employee representatives in a collective redundancies  situation.

It’s essentially the tribunal saying: you should have consulted properly, and you didn’t. The award is then paid to affected employees, and the tribunal can decide the amount (up to the legal maximum) based on what actually happened. If consultation was late, rushed, or not meaningful, the risk rises.

When do collective redundancies  rules kick in?

Collective consultation is usually triggered when you are proposing to make 20 or more employees redundant at one establishment within a 90-day period.

This is where SMEs often get caught out

A restructure rarely starts with, “We’re cutting 22 roles.” It starts with, “We need to reduce costs,” followed by a few role reductions, then another set, then a change in one department that tips the numbers up. When those decisions are connected, and they are within the same 90-day window, you can find yourself in collective consultation territory before you’ve even realised it exists.

The other phrase that causes confusion is “one establishment”. Sometimes it’s straightforward (one site, one headcount). Sometimes it isn’t — especially with depots, mobile staff, hybrid working patterns, or teams split across locations in a way that doesn’t match neat organisational charts. It’s one of the reasons we always encourage employers to check the legal position early rather than assume.

What changes from 6 April 2026?

The main change is simple: the cap doubles.

Even if a tribunal doesn’t award the maximum in every case, the doubling matters because it shifts the “worst case” dramatically. It also changes the commercial temptation some businesses fall into: moving too fast, thinking consultation can be bolted on afterwards, and hoping the consequences will be manageable. From April 2026, that’s a much riskier gamble.

What this could mean in pounds and pence

To see why this change matters, it helps to run a simple example.

Imagine you’re proposing redundancies at one site and the average daily pay for the employees affected works out at around £150 a day. Under the old cap, the maximum protective award was 90 days’ pay — so roughly £13,500 per person. If the cap doubles to 180 days’ pay, that becomes about £27,000 per person.

Now scale it up. If 25 employees are affected, the potential maximum exposure moves from around £337,500 to £675,000 — and that’s before you even consider the wider cost of a messy process: management time, legal fees, disruption, and the knock-on impact on morale and retention.

Tribunals don’t automatically award the maximum. But where there’s little evidence of meaningful consultation — or where consultation starts late and feels like a done deal — awards can still be significant.

Why SMEs are more likely to feel this

Larger employers often have internal HR teams, legal review, and established process documents. SMEs are usually doing this with lean management time, tight cashflow, and a strong desire to avoid disruption.

And that’s exactly when mistakes happen. In the real world, employers can slip into problems by:

• treating redundancy as an operational decision first and a legal process second
• underestimating how early the “proposal” stage starts
• counting redundancies too narrowly (for example, by team rather than across the wider programme)
• trying to consult after decisions are effectively made

Because protective awards sit across the affected group, you don’t need a “mass redundancy” for the numbers to take you over the threshold. A relatively ordinary restructure can become a very expensive lesson if collective consultation is missed.

Don’t forget the separate notification requirement

There’s also a separate legal obligation that is often overlooked: where collective redundancies  rules apply, employers must notify the Secretary of State, this has its own timing requirements.

This is one of those steps that SMEs miss simply because they haven’t had to do it before — and because the focus is usually on operational delivery, not complying with a law they have never heard of.

What SMEs should do now and how KeyHR can support you

If redundancies are even a possibility this year, the safest approach is to treat collective consultation as something you plan around — not something you try to “sort out” once the numbers are confirmed.

In practice, that means getting clear early on what reductions are being considered across the next 90 days, whether proposals are linked as part of the same programme, and what you’re counting as the relevant establishment. If you leave this until you’re ready to move, you can end up with a timetable that simply can’t be made compliant without delay — and that’s usually the point where employers start taking shortcuts.

This is exactly where KeyHR supports SMEs. When restructures go well, it’s rarely about clever wording in letters — it’s because the process is managed like a project: clear decisions, the right sequence, and a strong written record of what was discussed and when. We help you sense-check whether collective consultation is triggered, build a realistic timeline, prepare the right communications and consultation documentation, and keep the audit trail clean. That protects managers, supports employee relations, and—now the protective award cap is increasing—helps protect the business financially too.