Making Redundancies Legally – Advice for Businesses Across the UK

Redundancy occurs when: 

• The employer’s need for employees to do certain work has ceased or diminished. 
• The business is closing or relocating. 
• A workplace is restructuring, resulting in fewer roles. 

Redundancy is a form of dismissal caused by changes in the business’s operational needs, not due to employee performance or conduct. 

Employers risk claims of unfair dismissal, discrimination, or breach of contract if redundancy procedures are not followed correctly. This could result in costly Employment Tribunal claims and damage to the organisation’s reputation. 

By adhering to the law, employers demonstrate fairness, reduce disputes, and maintain positive employee relations, even during challenging circumstances. 

Business restructuring, closure, reduced workload, or technological changes may necessitate redundancies. Employers should document the reasons and ensure redundancy is a last resort. 

The redundancy plan should outline: 

• The reasons for redundancy. 
• Roles potentially affected. 
• The selection criteria. 
• Timelines for consultation and notice periods. 

Yes. Employers must consult with affected employees to explore alternatives and ensure the process is fair. 

• For fewer than 20 redundancies: Individual consultation is required. 
• For 20 or more redundancies in 90 days: Collective consultation is mandatory, and employers must consult with employee representatives or a trade union. 

Failure to consult may result in unfair dismissal claims and financial penalties. 

Employers must use objective, non-discriminatory criteria such as: 

• Skills, qualifications, and experience. 
• Attendance and disciplinary records. 

Yes, offering voluntary redundancy can reduce the need for compulsory redundancies. 

Notice periods depend on the employee’s length of service: 

• 1 week for 1-2 years of service. 
• 1 week per year of service for 2-12 years. 
• 12 weeks for 12+ years of service. 

Employees with 2+ years of service are entitled to statutory redundancy pay: 

• 0.5 week’s pay for each full year under age 22. 
• 1 week’s pay for each full year aged 22-40. 
• 1.5 week’s pay for each full year over age 41. 

 Weekly pay is capped at a statutory limit, which changes annually. Some employers offer enhanced redundancy packages. 

Employers can offer: 

• Job-seeking support or outplacement services. 
• References and training opportunities. 
• Emotional support or counselling. 

Yes, employees should be given the opportunity to appeal if they believe the process was unfair. 

20 or more redundancies at a single workplace within a 90-day period. 

Employer obligations for large-scale redundancies include: 

• Collective Consultation: Must consult employee representatives or a trade union for at least:
• 30 days before the first redundancy (20-99 employees). 
• 45 days before the first redundancy (100+ employees). 
• Notification to the Government: Employers must notify the Redundancy Payments Service (RPS) using an HR1 form. 

The most effective way to handle communications sensitively include: 

• Hold private meetings with affected employees. 
• Explain the reasons for redundancy clearly and empathetically. 
• Provide written confirmation of decisions. 

The key laws governing redundancy include: 

• Employment Rights Act 1996: Sets out statutory redundancy pay and notice requirements. 
• Trade Union and Labour Relations (Consolidation) Act 1992: Covers collective consultation requirements. 
• Equality Act 2010: Protects against discrimination during redundancy. 

Yes, if the process is discriminatory, lacks proper consultation, or uses unfair selection criteria. 

The most common mistakes employers make include: 

• Failing to consult employees adequately. 
• Using biased or subjective selection criteria. 
• Not providing appropriate notice or redundancy pay. 
• Overlooking alternative solutions to redundancy.