Few business decisions carry as much legal and human weight as making someone redundant. If you’re currently facing the prospect of workforce restructuring, you’re likely wrestling with more than just the paperwork; there’s the very real fear of an Employment Tribunal claim, the emotional difficulty of delivering life-changing news to people you’ve worked alongside, and the genuine complexity of calculating statutory entitlements correctly. You’re not alone in finding this process daunting.
The good news is that the redundancy process for employers in the UK, whilst undeniably detailed, is entirely manageable when you follow a clear, legally sound framework. Getting it right protects your business, preserves your reputation as a fair employer, and gives your remaining workforce the confidence to move forward without lingering uncertainty.
In this guide, we’ll walk you through every stage of a compliant redundancy process, from establishing a genuine business reason and running a fair consultation, through to calculating statutory redundancy pay and issuing the correct notice. Whether you’re considering a single redundancy or a larger-scale restructure, this is your practical roadmap to doing it properly.
Key Takeaways
The redundancy process for employers in the UK is governed by the Employment Rights Act 1996, and understanding exactly what qualifies as a genuine redundancy situation is your essential first line of defence against tribunal claims.
A fair selection process depends on objective, measurable criteria — the wrong approach here is one of the most common and costly mistakes employers make during restructuring.
Statutory redundancy pay, notice periods, and the obligation to explore suitable alternative employment are all non-negotiable legal requirements, and getting the calculations wrong can expose your business to significant liability.
Settlement Agreements and proactive consultation strategies can dramatically reduce your risk of litigation, giving both parties a cleaner, more dignified resolution to a difficult process.
Expert redundancy management support can mean the difference between a compliant, confidence-inspiring process and one that damages your business reputation and leaves your remaining workforce unsettled.
Understanding Genuine Redundancy and Your Legal Obligations
Before you take a single procedural step, you need to be absolutely clear on one foundational question: does your situation actually constitute a genuine redundancy in the eyes of the law? This isn’t a technicality to skim over. It’s the bedrock on which every subsequent decision in the redundancy process for employers in the UK is built, and getting it wrong at this stage creates problems that no amount of careful paperwork can fix later.
Under the Employment Rights Act 1996, redundancy is recognised as a potentially fair reason for dismissal, but only when it arises from one of three specific business circumstances:
Business closure: The entire organisation, or the part of it in which the employee works, is closing down.
Workplace closure: A specific site or location is closing, even if the business itself continues to operate elsewhere.
Reduced requirement for employees: The business needs fewer people to carry out work of a particular kind, whether due to restructuring, automation, or a genuine decline in demand.
Defining a Genuine Redundancy Situation
The single most important distinction to internalise here is this: it’s the role that becomes redundant, not the person. Redundancy is never a mechanism for removing a specific individual from your workforce; it’s the legitimate consequence of a business need that has changed or disappeared entirely.
This distinction matters enormously in practice. If you introduce new technology that absorbs the functions previously performed by a team member, that can trigger a genuine redundancy. If you relocate operations to a different city and an employee cannot reasonably commute or relocate, that too can constitute a valid redundancy situation. What you cannot do is identify an individual you’d prefer to let go and then construct a business rationale around them. Employment Tribunals are experienced at identifying precisely this pattern, and the consequences are significant.
The Risks of Procedural Errors
Employees with two or more years of continuous service have the right to bring an Employment Tribunal claim for unfair dismissal if the redundancy process is found to be flawed. A successful claim can result in a basic award, a compensatory award, and serious reputational damage. However, it’s critical to understand that discrimination claims carry no qualifying period whatsoever. An employee on day one of their employment can bring a claim if they believe their selection for redundancy was influenced by a protected characteristic such as age, pregnancy, or disability.
This is precisely why a best-practice approach is the only sensible approach, regardless of how long someone has worked for you. Short tenure doesn’t equal low risk. Treating every redundancy process with the same rigour protects you across the board.
There’s also a dimension that most procedural guides overlook entirely: the psychological impact on your remaining team. Handled poorly, a redundancy process creates a culture of fear and uncertainty that lingers long after the affected individuals have left. Your people are watching how you treat their colleagues, and the standards you demonstrate now will directly shape their trust in your leadership going forward. A transparent, dignified process isn’t just a legal safeguard; it’s an investment in the stability and morale of the workforce you’re retaining.
Navigating the Consultation and Selection Phases Fairly
Once you’ve established that a genuine redundancy situation exists, the process shifts into its most operationally demanding phase: consultation and selection. This is where the redundancy process for employers in the UK is most frequently mishandled, and where the risk of tribunal claims is at its highest. A structured, step-by-step approach isn’t just good practice; it’s your legal and reputational protection.
Step 1: Define Your Selection Pool
Before any scoring or scoring criteria are applied, you need to identify who is genuinely at risk. The pool should encompass all employees performing the same or similar roles to the one that is changing or disappearing. Narrowing the pool artificially to target a specific individual is one of the clearest indicators of a flawed process, and tribunals will scrutinise this closely.
Step 2: Establish Objective Selection Criteria
Your selection criteria must be measurable, consistently applied, and free from any connection to protected characteristics. A well-constructed scoring matrix typically draws on factors such as:
Skills and qualifications relevant to the business’s future needs
Performance based on documented appraisals and output records
Attendance, handled carefully to exclude absences related to disability or pregnancy
Adaptability and flexibility in response to changing business requirements
Disciplinary record, where relevant and proportionate
One criterion to avoid relying on solely is Last In, First Out (LIFO). Whilst length of service can form part of a balanced matrix, using it as the primary or sole criterion creates a direct age discrimination risk, since longer-serving employees are statistically older. This is a well-established legal pitfall, and it’s one that catches employers off guard with surprising regularity.
Individual vs Collective Consultation Rules
The rules governing consultation change significantly depending on the scale of your redundancies. If you’re proposing to make 20 or more employees redundant within a 90-day period at a single establishment, you’re in collective consultation territory. This triggers a mandatory minimum consultation period of 30 days before the first dismissal takes effect; for 100 or more redundancies, that period extends to 45 days.
Collective consultation also requires you to notify the Secretary of State using form HR1, submitted to the Insolvency Service before consultation begins. Failing to do so carries a criminal penalty. You’ll also need to consult with elected employee representatives or recognised trade union representatives, not simply with individuals directly.
For fewer than 20 redundancies, there’s no statutory minimum consultation period, but consultation must still be meaningful and genuine. Individual meetings are required, and employees must have a real opportunity to put forward alternatives or raise concerns before any final decision is made. Rushing this stage, or treating it as a box-ticking exercise, is a common and costly error.
Documenting every consultation meeting thoroughly is non-negotiable. Bespoke HR software can make this significantly more manageable, providing a structured, auditable record of every interaction, outcome, and decision throughout the process. In the event of a tribunal claim, that documentation trail is often the difference between a defensible position and an exposed one.
Objective Selection and the Concept of “Bumping”
One aspect of the selection phase that many guides gloss over entirely is bumping, and it’s a concept worth understanding clearly. Bumping occurs when an employee whose role is genuinely redundant is moved into a different, still-existing role within the business, and the person currently occupying that role is made redundant instead.
It sounds counterintuitive, but tribunals have consistently held that failing to consider bumping can render a redundancy unfair. The obligation to explore suitable alternative employment extends beyond the at-risk employee’s immediate role; it requires you to think more broadly about where their skills could be deployed across the organisation.
In practice, bumping tends to arise when a long-serving, highly skilled employee is at risk, and a suitable junior role exists that they could reasonably fill. The decision to bump or not to bump should be documented and reasoned, not simply ignored because it adds complexity.
Steps 4 and 5: Alternative Employment and Formal Notice
Before issuing any notice of redundancy, you’re legally required to consider whether suitable alternative employment exists within your organisation or any associated employer. Employees who are offered a suitable alternative and unreasonably refuse it may lose their entitlement to statutory redundancy pay. The offer must be made before the existing contract ends, and employees are entitled to a four-week trial period in the new role.
Once the consultation process is complete and a final decision has been reached, formal written notice must be issued in line with statutory or contractual notice periods, whichever is greater. Critically, employees must also be informed of their right to appeal the decision. An appeal stage isn’t optional; it’s a fundamental component of a fair process, and omitting it weakens your position considerably if a claim follows.
If you’d like tailored guidance on structuring your consultation process or scoring matrix, our redundancy advice service is designed to support employers at every stage, ensuring nothing falls through the cracks.
Managing Notice, Pay, and Suitable Alternative Employment
With consultation complete and decisions made, attention turns to the financial and contractual obligations that close out the redundancy process for employers in the UK correctly. These aren’t administrative afterthoughts; they’re legally enforceable entitlements, and errors here can unravel an otherwise well-managed process.
Statutory notice periods are straightforward in principle: employees are entitled to one week’s notice for each complete year of continuous service, up to a maximum of 12 weeks. However, always check the employee’s contract first. Where the contractual notice period exceeds the statutory minimum, the higher figure applies. Employers can also offer payment in lieu of notice (PILON) where the contract permits it, allowing the employment to end immediately without the employee working out their notice.
Calculating Redundancy Pay in 2026
Statutory redundancy pay is calculated using three variables: age, length of service, and weekly pay, subject to a statutory cap on weekly earnings. The age brackets determine the multiplier applied to each year of service:
Under 22: half a week’s pay per year of service
Age 22 to 40: one week’s pay per year of service
Age 41 and over: one and a half week’s pay per year of service
Service is capped at 20 years, and weekly pay is subject to a statutory maximum that is reviewed annually. Given that these figures change each April, it’s essential to use the latest redundancy calculator to ensure your figures are accurate and current. Redundancy pay up to £30,000 is generally tax-free, but you should always verify the tax treatment with your payroll provider, particularly where enhanced contractual payments push the total above that threshold.
Enhanced redundancy pay, where your contract or policy provides for it, is entirely separate from the statutory entitlement. If you offer enhanced terms, consistency in how you apply them is critical; selective enhancement can create discrimination risks of its own.
The Duty to Seek Alternative Roles
Before any redundancy is finalised, you’re legally required to consider whether suitable alternative employment exists within your organisation. “Suitable” is assessed against several factors: pay, status, location, hours, and the nature of the work itself. A role that requires a significant pay cut, a substantial change in seniority, or an unreasonable change in working location is unlikely to meet the threshold.
Where a genuinely suitable role is offered and an employee unreasonably refuses it, they may forfeit their entitlement to statutory redundancy pay. Determining what counts as “unreasonable” isn’t always clear-cut, which is why having well-drafted HR policies and contracts in place before any restructure begins is so valuable. Clear contractual definitions of mobility clauses, role flexibility, and pay structures give you a far stronger foundation when assessing suitability, and they remove ambiguity that employees or their representatives might otherwise exploit.
Every employee offered an alternative role is entitled to a four-week trial period. If the role proves unsuitable during that window, they retain their right to redundancy pay. Document the offer, the trial, and any outcome carefully. That paper trail matters.
Mitigating Risk and Professional Redundancy Management
Even a meticulously documented redundancy process carries residual risk. Consultation meetings can become contentious, scoring matrices can be challenged, and employees who feel aggrieved don’t always wait until their final day to instruct a solicitor. The final stage of the redundancy process for employers in the UK is therefore less about paperwork and more about protecting what you’ve built, whilst setting the conditions for genuine recovery.
There’s also something that most procedural guides simply don’t acknowledge: the emotional weight carried by the managers and directors who have to deliver this news, chair difficult hearings, and hold the business together throughout. That burden is real, and it deserves to be addressed directly.
Using Settlement Agreements Effectively
A Settlement Agreement offers both parties a clean, legally binding resolution that closes the door on future litigation. For the employer, it provides certainty. For the employee, it typically offers enhanced financial terms in exchange for waiving the right to bring a tribunal claim. The key legal requirement is that the employee must receive independent legal advice from a qualified adviser before the agreement is valid; without it, the waiver is unenforceable.
Where speed matters, combining a Settlement Agreement with a payment in lieu of notice can accelerate the transition considerably whilst keeping you fully compliant. The employment ends cleanly, the individual is fairly compensated, and both sides can move forward without the shadow of unresolved legal exposure. A well-handled exit also protects your employer brand; how you treat departing employees is noticed by everyone who remains, and it shapes your reputation in the wider market for talent.
How Altum HR Supports Your Restructure
For many SMEs, the challenge isn’t understanding what needs to happen; it’s having the internal capacity to execute it properly under pressure. Without a full-time HR director, complex restructuring can quickly overwhelm line managers who are already managing business continuity alongside the process itself. That’s precisely where fractional outsourced HR services deliver genuine, measurable value: you get senior-level expertise precisely when and where you need it, without the overhead of a permanent hire.
Altum HR brings calm, structured support to situations that rarely feel calm from the inside. From designing legally robust selection matrices and drafting consultation documentation, through to providing on-site support for difficult hearings where managers need an experienced professional alongside them, the focus is always on protecting your business whilst treating your people with genuine dignity.
Critically, the end of a redundancy process isn’t the end of your responsibility as a leader. The remaining team needs reassurance, clarity about the future, and visible evidence that the organisation is moving forward with purpose. Getting the process right creates the conditions for that recovery. Getting it wrong leaves a residue of anxiety that can affect retention and performance long after the restructuring is complete.
Take Control of Your Redundancy Process With Confidence
The redundancy process for employers in the UK is genuinely demanding, but it doesn’t have to feel unmanageable. When you ground every decision in a legitimate business reason, run a transparent and well-documented consultation, calculate entitlements accurately, and treat your people with dignity throughout, you’re not just protecting yourself legally. You’re demonstrating the kind of leadership that holds a business together under pressure.
The key principles are clear: establish genuine redundancy, apply objective selection criteria, consult meaningfully, and never overlook your duty to explore suitable alternatives. Get those fundamentals right, and the rest of the process follows a logical, defensible path.
Altum HR supports employers at every stage of this process, from expert employment law advice and bespoke HR software for compliance tracking, through to on-site support for difficult hearings when you need an experienced professional alongside you.
You don’t have to navigate this alone, and with the right support in place, you won’t have to.
Frequently Asked Questions About the Redundancy Process for UK Employers
How long does a fair redundancy process take in the UK?
There’s no single fixed timeframe, but a fair individual redundancy process typically takes a minimum of two to three weeks once you factor in meaningful consultation, scoring, and notice. For collective redundancies involving 20 to 99 employees, the mandatory minimum consultation period is 30 days before the first dismissal; for 100 or more, that extends to 45 days. Rushing the process to meet an internal deadline is one of the most common reasons employers find themselves exposed at tribunal.
Can I make someone redundant whilst they are on maternity leave?
Yes, but only if the redundancy is entirely genuine and the selection process is watertight. Employees on maternity leave hold a special legal status: if their role becomes redundant, they have a priority right to be offered any suitable alternative vacancy before other at-risk employees. Failing to honour that priority right is automatically unfair dismissal, regardless of how sound the underlying business reason is. This is a high-risk area that warrants specialist employment law advice before you proceed.
What is the difference between voluntary and compulsory redundancy?
Voluntary redundancy involves inviting employees to come forward and express an interest in leaving, typically in exchange for an enhanced financial package. Compulsory redundancy is where the employer selects individuals using an objective scoring process. Voluntary redundancy can reduce the number of compulsory exits and tends to generate less friction, but it doesn’t remove your obligation to run a fair process. You’re also not legally required to accept every volunteer, particularly if losing a specific individual would create an operational skills gap.
Do I have to pay redundancy if the employee has less than two years’ service?
Statutory redundancy pay only applies to employees with two or more years of continuous service, so there’s no statutory entitlement below that threshold. However, check your employment contracts and any redundancy policy carefully; some employers have contractual obligations that apply regardless of tenure. It’s also worth remembering that employees with less than two years’ service can still bring discrimination claims if they believe a protected characteristic influenced their selection, so a robust process remains essential.
What happens if an employee appeals the redundancy decision?
You must hear the appeal promptly and with genuine openness to reconsidering the outcome. The appeal should ideally be chaired by a manager who wasn’t involved in the original decision, which lends the process credibility and reduces the risk of it appearing predetermined. Document the appeal meeting thoroughly, communicate the outcome in writing, and give reasons for your decision. A well-handled appeal won’t necessarily change the outcome, but it significantly strengthens your position if a tribunal claim follows.
Can I hire someone new after making a role redundant?
Recruiting into a role shortly after making it redundant is one of the clearest indicators of a sham redundancy, and tribunals treat it as such. If the business need genuinely changes and a similar role becomes necessary again, you should be able to demonstrate a clear gap in time and a materially different business rationale. Where possible, consider offering the newly created role to the recently redundant employee first. If you’re in any doubt about the timing or optics of a new hire, take advice before advertising.
Article by
Josephine Broadstock
Josephine Broadstock is the Founder of Altum HR and a recognised thought leader in HR strategy and operational delivery. With a career grounded in employment law and hands-on business support, Josie has built a reputation for helping organisations move beyond transactional HR into truly strategic, commercially aligned people management.
At the core of Josie’s approach is a belief that HR should not sit in isolation—it should actively drive business performance. She works closely with business owners and leadership teams to understand how their organisations function in practice, not just on paper, enabling the design and implementation of people strategies that are both legally robust and operationally effective.
Josie specialises in translating complex employment law and HR challenges into clear, practical solutions that support growth, reduce risk, and improve organisational efficiency. Her work often focuses on bridging the gap between policy and execution—ensuring that processes are not only compliant but also embedded into day-to-day operations in a way that adds measurable value.
Through Altum HR, Josephine leads a team of highly qualified consultants who share her commitment to quality, personalisation, and commercial impact. She is particularly passionate about raising standards within the HR industry, advocating for a more consultative, expert-led approach that prioritises long-term business outcomes over quick fixes.
As an author, Josie shares insights on employment law developments, operational best practice, and real-world HR challenges, offering business leaders practical guidance they can apply immediately. Her content is designed to cut through complexity and provide clarity in an ever-evolving workplace landscape.
Disclaimer
Disclaimer The content on this blog is provided for general informational and educational purposes only and does not constitute professional advice. While we strive to ensure information is accurate and up to date, we make no warranties or representations about the completeness, accuracy, reliability, suitability, or availability of the information, products, services, or related graphics contained on the blog. Any reliance you place on such information is strictly at your own risk. We accept no liability for any loss or damage arising from the use of this blog or reliance on its content. No Professional Relationship Use of this blog does not create a professional client relationship between you and Altum HR. For personalised advice, please consult a qualified professional in the relevant field. Third‑Party Links and Content This blog may contain links to third‑party websites, products, or services. Links are provided for convenience only and do not imply endorsement. We are not responsible for the content, privacy practices, or accuracy of third‑party sites and accept no liability for any loss or damage arising from their use. Affiliate and Sponsored Content Where applicable, we may receive compensation for products or services mentioned. We only recommend products we believe in, but you should perform your own due diligence before purchasing. Intellectual Property All content on this blog is protected by copyright unless otherwise stated. You may not reproduce, distribute, or create derivative works from our content without prior written permission. Governing Law This disclaimer and any dispute arising out of or in connection with the blog are governed by the laws of England and Wales.
Few business decisions carry as much legal and human weight as making someone redundant. If you’re currently facing the prospect of workforce restructuring, you’re likely wrestling with more than just the paperwork; there’s the very real fear of an Employment Tribunal claim, the emotional difficulty of delivering life-changing news to people you’ve worked alongside, and the genuine complexity of calculating statutory entitlements correctly. You’re not alone in finding this process daunting.
The good news is that the redundancy process for employers in the UK, whilst undeniably detailed, is entirely manageable when you follow a clear, legally sound framework. Getting it right protects your business, preserves your reputation as a fair employer, and gives your remaining workforce the confidence to move forward without lingering uncertainty.
In this guide, we’ll walk you through every stage of a compliant redundancy process, from establishing a genuine business reason and running a fair consultation, through to calculating statutory redundancy pay and issuing the correct notice. Whether you’re considering a single redundancy or a larger-scale restructure, this is your practical roadmap to doing it properly.
Key Takeaways
The redundancy process for employers in the UK is governed by the Employment Rights Act 1996, and understanding exactly what qualifies as a genuine redundancy situation is your essential first line of defence against tribunal claims.
A fair selection process depends on objective, measurable criteria — the wrong approach here is one of the most common and costly mistakes employers make during restructuring.
Statutory redundancy pay, notice periods, and the obligation to explore suitable alternative employment are all non-negotiable legal requirements, and getting the calculations wrong can expose your business to significant liability.
Settlement Agreements and proactive consultation strategies can dramatically reduce your risk of litigation, giving both parties a cleaner, more dignified resolution to a difficult process.
Expert redundancy management support can mean the difference between a compliant, confidence-inspiring process and one that damages your business reputation and leaves your remaining workforce unsettled.
Understanding Genuine Redundancy and Your Legal Obligations
Before you take a single procedural step, you need to be absolutely clear on one foundational question: does your situation actually constitute a genuine redundancy in the eyes of the law? This isn’t a technicality to skim over. It’s the bedrock on which every subsequent decision in the redundancy process for employers in the UK is built, and getting it wrong at this stage creates problems that no amount of careful paperwork can fix later.
Under the Employment Rights Act 1996, redundancy is recognised as a potentially fair reason for dismissal, but only when it arises from one of three specific business circumstances:
Business closure: The entire organisation, or the part of it in which the employee works, is closing down.
Workplace closure: A specific site or location is closing, even if the business itself continues to operate elsewhere.
Reduced requirement for employees: The business needs fewer people to carry out work of a particular kind, whether due to restructuring, automation, or a genuine decline in demand.
Defining a Genuine Redundancy Situation
The single most important distinction to internalise here is this: it’s the role that becomes redundant, not the person. Redundancy is never a mechanism for removing a specific individual from your workforce; it’s the legitimate consequence of a business need that has changed or disappeared entirely.
This distinction matters enormously in practice. If you introduce new technology that absorbs the functions previously performed by a team member, that can trigger a genuine redundancy. If you relocate operations to a different city and an employee cannot reasonably commute or relocate, that too can constitute a valid redundancy situation. What you cannot do is identify an individual you’d prefer to let go and then construct a business rationale around them. Employment Tribunals are experienced at identifying precisely this pattern, and the consequences are significant.
The Risks of Procedural Errors
Employees with two or more years of continuous service have the right to bring an Employment Tribunal claim for unfair dismissal if the redundancy process is found to be flawed. A successful claim can result in a basic award, a compensatory award, and serious reputational damage. However, it’s critical to understand that discrimination claims carry no qualifying period whatsoever. An employee on day one of their employment can bring a claim if they believe their selection for redundancy was influenced by a protected characteristic such as age, pregnancy, or disability.
This is precisely why a best-practice approach is the only sensible approach, regardless of how long someone has worked for you. Short tenure doesn’t equal low risk. Treating every redundancy process with the same rigour protects you across the board.
There’s also a dimension that most procedural guides overlook entirely: the psychological impact on your remaining team. Handled poorly, a redundancy process creates a culture of fear and uncertainty that lingers long after the affected individuals have left. Your people are watching how you treat their colleagues, and the standards you demonstrate now will directly shape their trust in your leadership going forward. A transparent, dignified process isn’t just a legal safeguard; it’s an investment in the stability and morale of the workforce you’re retaining.
Navigating the Consultation and Selection Phases Fairly
Once you’ve established that a genuine redundancy situation exists, the process shifts into its most operationally demanding phase: consultation and selection. This is where the redundancy process for employers in the UK is most frequently mishandled, and where the risk of tribunal claims is at its highest. A structured, step-by-step approach isn’t just good practice; it’s your legal and reputational protection.
Step 1: Define Your Selection Pool
Before any scoring or scoring criteria are applied, you need to identify who is genuinely at risk. The pool should encompass all employees performing the same or similar roles to the one that is changing or disappearing. Narrowing the pool artificially to target a specific individual is one of the clearest indicators of a flawed process, and tribunals will scrutinise this closely.
Step 2: Establish Objective Selection Criteria
Your selection criteria must be measurable, consistently applied, and free from any connection to protected characteristics. A well-constructed scoring matrix typically draws on factors such as:
Skills and qualifications relevant to the business’s future needs
Performance based on documented appraisals and output records
Attendance, handled carefully to exclude absences related to disability or pregnancy
Adaptability and flexibility in response to changing business requirements
Disciplinary record, where relevant and proportionate
One criterion to avoid relying on solely is Last In, First Out (LIFO). Whilst length of service can form part of a balanced matrix, using it as the primary or sole criterion creates a direct age discrimination risk, since longer-serving employees are statistically older. This is a well-established legal pitfall, and it’s one that catches employers off guard with surprising regularity.
Individual vs Collective Consultation Rules
The rules governing consultation change significantly depending on the scale of your redundancies. If you’re proposing to make 20 or more employees redundant within a 90-day period at a single establishment, you’re in collective consultation territory. This triggers a mandatory minimum consultation period of 30 days before the first dismissal takes effect; for 100 or more redundancies, that period extends to 45 days.
Collective consultation also requires you to notify the Secretary of State using form HR1, submitted to the Insolvency Service before consultation begins. Failing to do so carries a criminal penalty. You’ll also need to consult with elected employee representatives or recognised trade union representatives, not simply with individuals directly.
For fewer than 20 redundancies, there’s no statutory minimum consultation period, but consultation must still be meaningful and genuine. Individual meetings are required, and employees must have a real opportunity to put forward alternatives or raise concerns before any final decision is made. Rushing this stage, or treating it as a box-ticking exercise, is a common and costly error.
Documenting every consultation meeting thoroughly is non-negotiable. Bespoke HR software can make this significantly more manageable, providing a structured, auditable record of every interaction, outcome, and decision throughout the process. In the event of a tribunal claim, that documentation trail is often the difference between a defensible position and an exposed one.
Objective Selection and the Concept of “Bumping”
One aspect of the selection phase that many guides gloss over entirely is bumping, and it’s a concept worth understanding clearly. Bumping occurs when an employee whose role is genuinely redundant is moved into a different, still-existing role within the business, and the person currently occupying that role is made redundant instead.
It sounds counterintuitive, but tribunals have consistently held that failing to consider bumping can render a redundancy unfair. The obligation to explore suitable alternative employment extends beyond the at-risk employee’s immediate role; it requires you to think more broadly about where their skills could be deployed across the organisation.
In practice, bumping tends to arise when a long-serving, highly skilled employee is at risk, and a suitable junior role exists that they could reasonably fill. The decision to bump or not to bump should be documented and reasoned, not simply ignored because it adds complexity.
Steps 4 and 5: Alternative Employment and Formal Notice
Before issuing any notice of redundancy, you’re legally required to consider whether suitable alternative employment exists within your organisation or any associated employer. Employees who are offered a suitable alternative and unreasonably refuse it may lose their entitlement to statutory redundancy pay. The offer must be made before the existing contract ends, and employees are entitled to a four-week trial period in the new role.
Once the consultation process is complete and a final decision has been reached, formal written notice must be issued in line with statutory or contractual notice periods, whichever is greater. Critically, employees must also be informed of their right to appeal the decision. An appeal stage isn’t optional; it’s a fundamental component of a fair process, and omitting it weakens your position considerably if a claim follows.
If you’d like tailored guidance on structuring your consultation process or scoring matrix, our redundancy advice service is designed to support employers at every stage, ensuring nothing falls through the cracks.
Managing Notice, Pay, and Suitable Alternative Employment
With consultation complete and decisions made, attention turns to the financial and contractual obligations that close out the redundancy process for employers in the UK correctly. These aren’t administrative afterthoughts; they’re legally enforceable entitlements, and errors here can unravel an otherwise well-managed process.
Statutory notice periods are straightforward in principle: employees are entitled to one week’s notice for each complete year of continuous service, up to a maximum of 12 weeks. However, always check the employee’s contract first. Where the contractual notice period exceeds the statutory minimum, the higher figure applies. Employers can also offer payment in lieu of notice (PILON) where the contract permits it, allowing the employment to end immediately without the employee working out their notice.
Calculating Redundancy Pay in 2026
Statutory redundancy pay is calculated using three variables: age, length of service, and weekly pay, subject to a statutory cap on weekly earnings. The age brackets determine the multiplier applied to each year of service:
Under 22: half a week’s pay per year of service
Age 22 to 40: one week’s pay per year of service
Age 41 and over: one and a half week’s pay per year of service
Service is capped at 20 years, and weekly pay is subject to a statutory maximum that is reviewed annually. Given that these figures change each April, it’s essential to use the latest redundancy calculator to ensure your figures are accurate and current. Redundancy pay up to £30,000 is generally tax-free, but you should always verify the tax treatment with your payroll provider, particularly where enhanced contractual payments push the total above that threshold.
Enhanced redundancy pay, where your contract or policy provides for it, is entirely separate from the statutory entitlement. If you offer enhanced terms, consistency in how you apply them is critical; selective enhancement can create discrimination risks of its own.
The Duty to Seek Alternative Roles
Before any redundancy is finalised, you’re legally required to consider whether suitable alternative employment exists within your organisation. “Suitable” is assessed against several factors: pay, status, location, hours, and the nature of the work itself. A role that requires a significant pay cut, a substantial change in seniority, or an unreasonable change in working location is unlikely to meet the threshold.
Where a genuinely suitable role is offered and an employee unreasonably refuses it, they may forfeit their entitlement to statutory redundancy pay. Determining what counts as “unreasonable” isn’t always clear-cut, which is why having well-drafted HR policies and contracts in place before any restructure begins is so valuable. Clear contractual definitions of mobility clauses, role flexibility, and pay structures give you a far stronger foundation when assessing suitability, and they remove ambiguity that employees or their representatives might otherwise exploit.
Every employee offered an alternative role is entitled to a four-week trial period. If the role proves unsuitable during that window, they retain their right to redundancy pay. Document the offer, the trial, and any outcome carefully. That paper trail matters.
Mitigating Risk and Professional Redundancy Management
Even a meticulously documented redundancy process carries residual risk. Consultation meetings can become contentious, scoring matrices can be challenged, and employees who feel aggrieved don’t always wait until their final day to instruct a solicitor. The final stage of the redundancy process for employers in the UK is therefore less about paperwork and more about protecting what you’ve built, whilst setting the conditions for genuine recovery.
There’s also something that most procedural guides simply don’t acknowledge: the emotional weight carried by the managers and directors who have to deliver this news, chair difficult hearings, and hold the business together throughout. That burden is real, and it deserves to be addressed directly.
Using Settlement Agreements Effectively
A Settlement Agreement offers both parties a clean, legally binding resolution that closes the door on future litigation. For the employer, it provides certainty. For the employee, it typically offers enhanced financial terms in exchange for waiving the right to bring a tribunal claim. The key legal requirement is that the employee must receive independent legal advice from a qualified adviser before the agreement is valid; without it, the waiver is unenforceable.
Where speed matters, combining a Settlement Agreement with a payment in lieu of notice can accelerate the transition considerably whilst keeping you fully compliant. The employment ends cleanly, the individual is fairly compensated, and both sides can move forward without the shadow of unresolved legal exposure. A well-handled exit also protects your employer brand; how you treat departing employees is noticed by everyone who remains, and it shapes your reputation in the wider market for talent.
How Altum HR Supports Your Restructure
For many SMEs, the challenge isn’t understanding what needs to happen; it’s having the internal capacity to execute it properly under pressure. Without a full-time HR director, complex restructuring can quickly overwhelm line managers who are already managing business continuity alongside the process itself. That’s precisely where fractional outsourced HR services deliver genuine, measurable value: you get senior-level expertise precisely when and where you need it, without the overhead of a permanent hire.
Altum HR brings calm, structured support to situations that rarely feel calm from the inside. From designing legally robust selection matrices and drafting consultation documentation, through to providing on-site support for difficult hearings where managers need an experienced professional alongside them, the focus is always on protecting your business whilst treating your people with genuine dignity.
Critically, the end of a redundancy process isn’t the end of your responsibility as a leader. The remaining team needs reassurance, clarity about the future, and visible evidence that the organisation is moving forward with purpose. Getting the process right creates the conditions for that recovery. Getting it wrong leaves a residue of anxiety that can affect retention and performance long after the restructuring is complete.
Take Control of Your Redundancy Process With Confidence
The redundancy process for employers in the UK is genuinely demanding, but it doesn’t have to feel unmanageable. When you ground every decision in a legitimate business reason, run a transparent and well-documented consultation, calculate entitlements accurately, and treat your people with dignity throughout, you’re not just protecting yourself legally. You’re demonstrating the kind of leadership that holds a business together under pressure.
The key principles are clear: establish genuine redundancy, apply objective selection criteria, consult meaningfully, and never overlook your duty to explore suitable alternatives. Get those fundamentals right, and the rest of the process follows a logical, defensible path.
Altum HR supports employers at every stage of this process, from expert employment law advice and bespoke HR software for compliance tracking, through to on-site support for difficult hearings when you need an experienced professional alongside you.
You don’t have to navigate this alone, and with the right support in place, you won’t have to.
Frequently Asked Questions About the Redundancy Process for UK Employers
How long does a fair redundancy process take in the UK?
There’s no single fixed timeframe, but a fair individual redundancy process typically takes a minimum of two to three weeks once you factor in meaningful consultation, scoring, and notice. For collective redundancies involving 20 to 99 employees, the mandatory minimum consultation period is 30 days before the first dismissal; for 100 or more, that extends to 45 days. Rushing the process to meet an internal deadline is one of the most common reasons employers find themselves exposed at tribunal.
Can I make someone redundant whilst they are on maternity leave?
Yes, but only if the redundancy is entirely genuine and the selection process is watertight. Employees on maternity leave hold a special legal status: if their role becomes redundant, they have a priority right to be offered any suitable alternative vacancy before other at-risk employees. Failing to honour that priority right is automatically unfair dismissal, regardless of how sound the underlying business reason is. This is a high-risk area that warrants specialist employment law advice before you proceed.
What is the difference between voluntary and compulsory redundancy?
Voluntary redundancy involves inviting employees to come forward and express an interest in leaving, typically in exchange for an enhanced financial package. Compulsory redundancy is where the employer selects individuals using an objective scoring process. Voluntary redundancy can reduce the number of compulsory exits and tends to generate less friction, but it doesn’t remove your obligation to run a fair process. You’re also not legally required to accept every volunteer, particularly if losing a specific individual would create an operational skills gap.
Do I have to pay redundancy if the employee has less than two years’ service?
Statutory redundancy pay only applies to employees with two or more years of continuous service, so there’s no statutory entitlement below that threshold. However, check your employment contracts and any redundancy policy carefully; some employers have contractual obligations that apply regardless of tenure. It’s also worth remembering that employees with less than two years’ service can still bring discrimination claims if they believe a protected characteristic influenced their selection, so a robust process remains essential.
What happens if an employee appeals the redundancy decision?
You must hear the appeal promptly and with genuine openness to reconsidering the outcome. The appeal should ideally be chaired by a manager who wasn’t involved in the original decision, which lends the process credibility and reduces the risk of it appearing predetermined. Document the appeal meeting thoroughly, communicate the outcome in writing, and give reasons for your decision. A well-handled appeal won’t necessarily change the outcome, but it significantly strengthens your position if a tribunal claim follows.
Can I hire someone new after making a role redundant?
Recruiting into a role shortly after making it redundant is one of the clearest indicators of a sham redundancy, and tribunals treat it as such. If the business need genuinely changes and a similar role becomes necessary again, you should be able to demonstrate a clear gap in time and a materially different business rationale. Where possible, consider offering the newly created role to the recently redundant employee first. If you’re in any doubt about the timing or optics of a new hire, take advice before advertising.
Article by
Josephine Broadstock
Josephine Broadstock is the Founder of Altum HR and a recognised thought leader in HR strategy and operational delivery. With a career grounded in employment law and hands-on business support, Josie has built a reputation for helping organisations move beyond transactional HR into truly strategic, commercially aligned people management.
At the core of Josie’s approach is a belief that HR should not sit in isolation—it should actively drive business performance. She works closely with business owners and leadership teams to understand how their organisations function in practice, not just on paper, enabling the design and implementation of people strategies that are both legally robust and operationally effective.
Josie specialises in translating complex employment law and HR challenges into clear, practical solutions that support growth, reduce risk, and improve organisational efficiency. Her work often focuses on bridging the gap between policy and execution—ensuring that processes are not only compliant but also embedded into day-to-day operations in a way that adds measurable value.
Through Altum HR, Josephine leads a team of highly qualified consultants who share her commitment to quality, personalisation, and commercial impact. She is particularly passionate about raising standards within the HR industry, advocating for a more consultative, expert-led approach that prioritises long-term business outcomes over quick fixes.
As an author, Josie shares insights on employment law developments, operational best practice, and real-world HR challenges, offering business leaders practical guidance they can apply immediately. Her content is designed to cut through complexity and provide clarity in an ever-evolving workplace landscape.
Disclaimer
Disclaimer The content on this blog is provided for general informational and educational purposes only and does not constitute professional advice. While we strive to ensure information is accurate and up to date, we make no warranties or representations about the completeness, accuracy, reliability, suitability, or availability of the information, products, services, or related graphics contained on the blog. Any reliance you place on such information is strictly at your own risk. We accept no liability for any loss or damage arising from the use of this blog or reliance on its content. No Professional Relationship Use of this blog does not create a professional client relationship between you and Altum HR. For personalised advice, please consult a qualified professional in the relevant field. Third‑Party Links and Content This blog may contain links to third‑party websites, products, or services. Links are provided for convenience only and do not imply endorsement. We are not responsible for the content, privacy practices, or accuracy of third‑party sites and accept no liability for any loss or damage arising from their use. Affiliate and Sponsored Content Where applicable, we may receive compensation for products or services mentioned. We only recommend products we believe in, but you should perform your own due diligence before purchasing. Intellectual Property All content on this blog is protected by copyright unless otherwise stated. You may not reproduce, distribute, or create derivative works from our content without prior written permission. Governing Law This disclaimer and any dispute arising out of or in connection with the blog are governed by the laws of England and Wales.
From HR advice, policies to Employment Law, Redundancy Support and Employee Contracts - we can help. Leave your details below and we'll be in touch.
Your data will be processed inline with our privacy policy. We respect your right to privacy and continuously strive to ensure that all data that we collect and store is done so securely and is properly protected.
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
