Making redundancies is one of the most difficult decisions any employer faces. Done badly, it exposes your business to costly tribunal claims, reputational damage, and loss of employee trust. Done properly, it protects your organisation while demonstrating fairness and professionalism.
This guide explains the UK redundancy process from an employer’s perspective—what the law requires, where businesses go wrong, and how to run a compliant, defensible process.
What counts as a genuine redundancy?
Before anything else, you must establish whether a true redundancy situation exists. Under UK employment law, redundancy arises where:
- the business (or part of it) closes
- a workplace closes or relocates
- there is a reduced need for employees to do work of a particular kind
Crucially, redundancy is about the role, not the individual. Using redundancy to deal with performance issues is a common mistake—and a frequent cause of unfair dismissal claims.
Step 1: Build and document your business case
A fair process starts with a clear, evidence-based rationale. You should:
- define the commercial or operational reason for redundancies
- show that alternatives (redeployment, reduced hours, recruitment freezes) have been considered
- document your decision-making
This early stage sets the tone. If challenged later, tribunals will look not just at the reason but whether your process was transparent and reasonable.
Step 2: Identify the selection pool
Where fewer roles than employees remain, you must identify a selection pool—the group from which redundancies will be made.
A fair pool includes employees doing similar or interchangeable work. [acas.org.uk]
Poorly defined pools are a major legal risk. A tribunal will look closely at whether you deliberately narrowed the pool to target individuals.
Step 3: Define fair selection criteria
Selection must be objective, measurable and consistently applied. Typical criteria include:
- performance or quality of work
- skills, qualifications and experience
- attendance record (excluding protected absences)
- disciplinary record
You should avoid subjective or discriminatory criteria and ensure scoring can be evidenced. If you can't justify your scoring, the redundancy is vulnerable to challenge.
Step 4: Consultation — the most critical stage
Consultation is not optional—it is central to a fair redundancy process.
Employers must consult before decisions are finalised, allowing employees to respond and suggest alternatives.
Individual consultation
If fewer than 20 redundancies are proposed, you should consult directly with affected employees.
Collective consultation
If 20 or more redundancies are proposed within 90 days at one establishment:
- you must consult employee representatives
- you must notify the government using form HR1
- you must start consultation at least:
- 30 days before dismissal (20–99 redundancies)
- 45 days before dismissal (100+ redundancies) [gov.uk]
Failure to comply can lead to significant financial penalties and compensation awards.
What should consultation cover?
You must provide clear written information and discuss:
- reasons for the redundancies
- numbers and roles affected
- proposed selection methods
- ways to avoid or reduce redundancies
- how redundancy pay will be calculated
Importantly, consultation must be genuine. If the outcome is pre determined, the process may be deemed unfair.
Step 5: Consider alternatives to redundancy
Throughout consultation, you are expected to explore alternatives, including:
- redeployment to suitable roles
- voluntary redundancy
- reduced hours or job sharing
Offering suitable alternative employment is not just good practice—it is often a legal expectation in demonstrating a fair process.
Step 6: Make decisions and confirm outcomes
Once consultation has concluded and feedback considered:
- confirm redundancy selections
- issue formal written notice
- explain the rationale and scoring (where applicable)
Employees should be informed clearly and sensitively, with an opportunity to ask questions.
Step 7: Provide notice and redundancy pay
Employees are entitled to:
- statutory or contractual notice
- statutory redundancy pay (if eligible)
- final pay including accrued holiday
Failure to pay correctly is a common trigger for disputes and claims.
Step 8: Offer the right to appeal
A fair process should include an appeal stage, allowing employees to challenge:
- their selection
- scoring
- procedural fairness
This step can often resolve issues early and reduce tribunal risk.
Common employer mistakes to avoid
Even where a genuine redundancy exists, the process can still fail. Common pitfalls include:
- failing to consult properly
- using subjective or inconsistent selection criteria
- pre-determining outcomes
- ignoring alternative roles
- poor documentation
Tribunals frequently focus more on “how” redundancies were handled than “why”.
Final thoughts: process matters as much as rationale
Redundancy is one of the few potentially fair reasons for dismissal under UK law—but only if handled correctly. A clear, structured and well documented process is your strongest protection.
If you’re managing redundancies or want a practical, step by step framework you can use immediately, these resources will help:
