A Clear Guide to the Redundancy Process for Employers

Redundancy is one of the most challenging situations an employer can face – emotionally, operationally and legally. When handled well, it protects both your organisation and the people affected. When handled poorly, it risks damaging morale, reputation and can lead to costly legal claims.

This guide walks you through the key stages of a fair and compliant redundancy process, based on best‑practice guidance from ACAS and wider UK employment resources.

What Is Redundancy?

Redundancy is a form of dismissal that happens when a role is no longer needed. For example, if the business closes, restructures, changes location or reduces the number of roles performing certain work.

To be genuine, the job itself must cease to exist, not simply be an excuse to remove a particular individual.

1. Confirm Whether Redundancy Is Necessary

Before starting any formal process, employers should carefully examine why redundancies are being considered and whether there are alternatives. At Altum HR, we stress that redundancy should always be a last resort.

Alternatives might include:

• Reducing or reorganising working hours
• Offering voluntary redundancy
• Redeployment into other roles
• Reducing overtime or pausing recruitment
• Ending temporary or agency contracts where appropriate
• If appropriate, place the employee on a Performance Improvement Plan (PIP)

Taking time at this early stage helps employers avoid unnecessary dismissals and ensure decisions are well‑justified.

2. Build a Strong Business Case

A solid business rationale keeps the process fair and focused on roles, not individuals. Employers must base decisions on legitimate operational reasons – not performance concerns or personal issues. Attempting to engineer a redundancy to remove an unwanted employee can lead to unfair dismissal or discrimination claims.

3. Identify the ‘Selection Pool’

If only some roles are affected, the next step is to define a fair and reasonable selection pool. Factors might include:

• Type of role and title
• Department or location
• Interchangeable duties

Your selection criteria should be objective and measurable. Scoring matrixes are usually required with clear, quantifiable evidence of what the role requires. For example, qualifications, skills disciplinary record. Avoid vague terms like “flexibility” or “commitment,” as these can open the door to accusations of bias.

4. Consult With Employees

Consultation is a critical legal requirement – both individually and collectively (where 20+ dismissals are proposed within 90 days at a single site). Employers must explain:

• Why redundancies are being proposed
• How many roles are at risk
• How individuals were selected
• What alternatives exist

Collective consultation must start at least:

• 30 days before the first dismissal (20–99 redundancies)
• 45 days before the first dismissal (100+ redundancies)

Even where collective consultation applies, individual consultation is still necessary. It’s not enough to speak only to representatives – consultation must be meaningful.

5. Explore Suitable Alternative Employment

Before finalising any dismissal, employers must make reasonable attempts to place at‑risk employees into suitable alternative roles within the organisation. Employees can try an alternative role for four weeks without losing redundancy pay rights. [gov.uk]

This step is a key part of demonstrating fairness and reducing the number of compulsory redundancies.

6. Issue Notice of Redundancy

If redundancy is confirmed following consultation, employers must:

• Provide written notice
• Outline redundancy pay entitlements
• Allow reasonable paid time off to search for new work (if the employee has two years’ continuous service) during the process or notice period.
  [gov.uk]

Notice periods and payments will depend on length of service and contractual terms.

7. Support Employees Throughout

Redundancy is not simply a legal process – it’s a human one. Good practice (endorsed by CIPD) encourages employers to act with compassion by:

• Communicating clearly and sensitively
• Offering outplacement or wellbeing support
• Handling appeals fairly
• Supporting remaining employees through the change
  [cipd.org]

A transparent, empathetic approach preserves trust and protects your employer brand.

8. Avoid Costly Pitfalls

Following ACAS guidance helps minimise the risk of tribunal claims by ensuring:

• Proper consultation
• Objective selection
• Exploration of alternatives
• Clear documentation

Compliance isn’t just a legal necessity – it’s part of ethical people management.

Final Thoughts

Redundancy is undeniably difficult, but a clear, well‑planned process helps protect your business and ensures employees are treated fairly. The key themes are transparency, fairness and compassion.

Need expert support with a redundancy process? Altum HR provides clear, practical guidance at every step – from early planning to final documentation. Download our checklist now or contact us here.