Legal News | 27.08.26

Planning a Workplace Closure in 2026: Collective Consultation Deadlines and HR1 Requirements

For employers planning to close a site, restructure a division or reduce headcount, the timetable can be just as important as the commercial decision itself.  Since April 2026, the potential consequences of getting the process wrong have increased significantly, with further reforms expected in 2027.

Careful planning is therefore essential.  Employers should ensure that they understand when collective consultation duties arise, when consultation must begin, and what additional steps must be taken before any dismissals take effect.

Workplace Closures Can Trigger Redundancy Consultation Duties

It is sometimes assumed that collective redundancy consultation obligations only apply where a business is being sold or transferred.  That is not the case.

The closure of a workplace is itself capable of amounting to a redundancy situation.  A consultation obligation may therefore arise because of a lease expiry, reduced demand, increased operating costs or a decision to cease trading altogether.

Where an employer proposes to dismiss 20 or more employees as redundant at one establishment within any 90-day period, it must carry out collective consultation with appropriate representatives.

The meaning of “establishment” is particularly important and can be fact sensitive. At present, it generally refers to the unit to which the affected employees are assigned to carry out their duties. Depending on the operational arrangements, this may be a particular site, workplace or distinct local employment unit, rather than the organisation as a whole. However, this position is expected to be supplemented by further reforms due to take effect in 2027.

Where a closure forms part of a transaction involving a relevant business transfer or service provision change, separate information and consultation obligations under TUPE may also arise. A share sale will not ordinarily trigger TUPE because the identity of the employer does not change. Where TUPE and proposed redundancies overlap, the legal analysis can be complex and should be addressed at an early stage.

It is also important to remember that collective consultation does not replace the obligation to consult individually with affected employees.  Individual consultation remains a key part of ensuring that any dismissal is fair, regardless of the number of redundancies proposed.

Getting the Consultation Timetable Right

Collective consultation must begin in good time and at least the relevant minimum period before the first dismissal takes effect.  Employers must therefore work backwards from the intended dismissal or closure date when planning their timetable.

The minimum periods are:

The above are minimum lead times before the first dismissal takes effect, not prescribed consultation periods. Consultation must begin “in good time” and may need to start earlier where the proposals are particularly large or complex.

There are two common pitfalls.  First, these are calendar days, not working days.  Bank holidays, weekends and periods of workplace closure do not pause the consultation period. Secondly, employers should not assume that informal discussions with employees amount to the commencement of statutory collective consultation. Consultation must be undertaken with the appropriate representatives, and the prescribed information must be provided in writing. Employers should therefore ensure that they can clearly identify and evidence the date on which compliant collective consultation began.

Employers should therefore allow sufficient time before the statutory consultation period begins to identify existing employee representatives or arrange elections where necessary, prepare the required written information for consultation, and develop a realistic timetable for the wider redundancy process.

Individual consultation and employee notice periods must also be factored into the overall timeframe.

Consultation Must Be Genuine and Meaningful

A common mistake is to present a closure and the resulting redundancies as a final, irreversible decision before consultation begins. An employer may have a preferred proposal and an indicative timetable, but consultation must not be treated as a formality.

The purpose of consultation is to provide a genuine opportunity to explore ways of avoiding dismissals, reducing the number of employees affected and mitigating the consequences of any dismissals. Employers must seriously consider representations made by employee representatives and explain why any proposals are not accepted.

This means that proposals must remain open to discussion and potential change throughout the consultation process.  A decision that has already been made and presented as final risks undermining the fairness of the process.

Do Not Overlook Form HR1

Employers proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less must also notify the Secretary of State, in practice through the Insolvency Service’s online HR1 service.

A copy of the HR1 notification must also be provided to the employee representatives. The notification must be submitted at least 30 or 45 days before the first dismissal takes effect, depending on the number of proposed redundancies.  It must also be submitted before any employee is given notice of dismissal.

This administrative requirement is often overlooked during the practical challenges of managing a closure.  However, failure to submit the required notification is a criminal offence and may result in an unlimited fine.  In certain circumstances, directors, managers or other officers involved in the decision-making process may also face personal liability.

The Cost of Getting the Process Wrong Has Increased

Since 6 April 2026, the Employment Rights Act 2025 has increased the maximum protective award available where an employer fails to comply with collective consultation obligations.

The maximum award has doubled from 90 days’ pay to 180 days’ pay per affected employee.  Unlike many employment awards, this is not subject to the usual statutory weekly pay cap. The maximum is not automatic: the tribunal will determine what is just and equitable, having regard to the seriousness of the employer’s failure.

For employers carrying out larger restructuring exercises, the potential financial exposure is therefore substantial.

Where a redundancy process also involves dismissal and re-engagement to change contractual terms, employers may face further consequences, including a potential uplift of up to 25% where the relevant statutory code of practice has not been followed.

Further Changes Expected in 2027

Further reform is expected in 2027, when an additional organisation-wide threshold is due to be introduced.

The change is intended to ensure that collective consultation duties may arise where redundancies are spread across multiple workplaces, even where no single establishment reaches the current threshold of 20 employees.

The government’s consultation on the detail of this new threshold closed in May 2026, and further guidance is awaited.  Employers considering closures or restructures over the next year or two should keep these developments under review and avoid building timetables that leave little room for flexibility.

Redundancy Consultation Checklist

Employers planning a closure or restructuring should also be consider the following:

• Confirm whether 20 or more redundancies are proposed at one establishment within any rolling 90-day period.
• Consider whether any forthcoming organisation-wide threshold may affect the analysis.
• Identify or elect appropriate employee representatives before collective consultation begins.
• Work backwards from the intended dismissal date and allow at least 30 or 45 calendar days before the first dismissal takes effect, depending on the number of proposed redundancies.
• Build additional time into the timetable for preparation, elections, information gathering and individual consultation.
• Submit Form HR1 before any notice of dismissal is given.
• Keep clear records demonstrating that consultation was genuine and capable of influencing the outcome.
• Review the impact of forthcoming 2027 reforms when planning future restructures.

Early Advice Can Preserve Options

The timetable for carrying out a compliant closure or redundancy process requires careful planning, and the consequences of failing to follow the correct procedure have become increasingly significant.

At Wansbroughs, our Employment & HR team regularly advises businesses on the legal, practical and commercial considerations involved in closures, restructures and redundancy programmes.  Involving us at an early stage can help preserve options, avoid unnecessary risk and ensure that the process is managed effectively.

Please get in touch if you would like to discuss your plans.

This article should not be relied upon as legal advice.  If you would like specific legal advice, or require any assistance, please get in touch on 020 4549 2460 or 01380 733300 | commercial@wansbroughs.com