This guide walks through every stage of a fair and legally compliant UK redundancy process, from initial planning to final payments. Following these steps reduces the risk of unfair dismissal claims and Employment Tribunal proceedings.
Document clearly why redundancies are necessary — reduced revenue, restructuring, technology changes, or closure of a business unit. The reason must be genuine; redundancy cannot be used as a disguised dismissal for performance or conduct reasons.
Identify which roles or groups of employees are affected. The pool must be defined fairly and logically. Be careful not to define it so narrowly that it guarantees a specific person is selected.
Create a scoring matrix with measurable, objective criteria such as: skills and qualifications; performance against targets; attendance record (excluding disability-related absences); and disciplinary record. Apply the scores consistently and document everything.
Notify all employees in the selection pool that they are at risk of redundancy. This is not a final decision — it is the start of consultation. For fewer than 20 redundancies, there is no fixed consultation period, but it must be genuine and meaningful.
Hold individual meetings with each at-risk employee. Employees have the right to be accompanied by a trade union representative or a workplace colleague. Discuss alternatives to redundancy — reduced hours, redeployment, voluntary redundancy, or career breaks. Record the outcomes of each meeting in writing.
You must make genuine efforts to find suitable alternative roles before confirming redundancy. If a suitable alternative exists, the employee must be offered it — on a statutory 4-week trial period if the role differs from their current one. Employees on maternity or adoption leave must be offered suitable alternative roles ahead of other employees.
Once consultation is complete and no alternatives are available, confirm the redundancy in writing. The letter must include the reasons, notice period, redundancy pay calculation, and the right to appeal.
The appeal must be heard by a manager not involved in the original decision. Follow the ACAS Code of Practice — failure to allow an appeal can increase any tribunal award by up to 25%.
Calculate and pay: statutory redundancy pay; notice pay (or PILON); accrued holiday pay; and any enhanced payments under the contract. Issue a P45 on the last day of employment.