I Wonder How to Run a Fair and Legally Compliant Redundancy Process

Business needs can sometimes change. Work may reduce, a site may close, or you may need to reorganise how work is done. Sometimes this means certain roles are no longer required. Redundancy is one of the most sensitive processes an employer can manage, and how it is handled can have a lasting effect on morale, trust and productivity.

For HR professionals and employers, the aim is to manage the change fairly, clearly and with respect. A well-planned process also reduces the risk of employment tribunal claims. This article will explore how a Fair Redundancy Process can be carried out.

What Does a Fair Redundancy Process Involve?

Redundancy usually arises when an employer needs fewer people to carry out a particular type of work, or when a workplace or the business is closing. When a role is no longer needed, the employee is not being dismissed for doing something wrong.

Even when a genuine business reason for redundancy exists, a dismissal may still be unfair if the process is poorly handled. A fair process will usually include:

• Confirming there is a genuine redundancy situation
• Identifying which roles are at risk and who is in the selection pool
• Consulting with affected employees (and, in some cases, employee representatives)
• Using fair selection criteria where you need to choose between employees
• Looking for suitable alternative roles
• Giving proper notice and paying the correct entitlements

If a company is proposing 20 or more redundancies at one establishment within 90 days, collective consultation rules also apply. You must inform and consult recognised trade unions or elected employee representatives, and submit an advance notification HR1 form to the Redundancy Payments Service.

Consultation must start at least 30 days before the first dismissal takes effect, rising to 45 days where 100 or more redundancies are proposed. Even where collective consultation applies, you still need to consult individually with each affected employee.

What are the Key Responsibilities for Employers

Selection – A sensible starting point is a clear, documented business case. It doesn't need to be lengthy; it just needs to explain what is changing, why, and which roles may be reduced or eliminated.

Choosing between employees can be one of the toughest parts of the process. Where selection is needed, it helps to:

• Identify a reasonable selection pool, in other words, who is in scope
• Consult on the pool and the proposed criteria
• Use criteria that are as objective and evidence-based as possible

Relevant skills, qualifications, performance, disciplinary record and attendance may all feature. Attendance needs particular care: disability-related absence may require adjustment, while pregnancy-related absence must not be counted against an employee.

Consultation – Good consultation should feel like a genuine conversation, rather than an announcement with a meeting attached. Sharing proposals early gives employees time to understand them, ask questions and suggest alternatives. Those views should be properly considered, with room for the proposal to change where appropriate.

For collective consultation, the timetable must include the statutory minimum period. If no recognised trade union or existing employee forum exists, representative elections may also be needed. The required information should be provided in writing, and dismissal notices should wait until the minimum consultation period has ended.

Suitable alternatives – Redundancy should not be the only path explored. Share suitable vacancies across the organisation and, where appropriate, the wider group should be shared with employees at risk. A little reasonable training may be enough to make a role suitable.

Employees who are pregnant and meet the statutory conditions, or who are on or have recently returned from certain types of family leave, may have priority for suitable alternative vacancies. A statutory four-week trial period may also apply when an alternative role is accepted.

End of the process – Once consultation is complete, the outcome should be confirmed clearly and sensitively. That includes giving the correct notice and making all payments due. Statutory redundancy pay depends on age, length of service, and weekly pay, subject to statutory limits, so it is worth checking the employment contract and relevant policies for any enhanced terms.

What are the risks of getting this wrong?

The consequences are not only legal. A poorly managed process can also disrupt the business and damage trust.

• Unfair dismissal and discrimination claims - Even where redundancies are genuine, a weak process or biased selection can lead to tribunal claims and significant management time.
   
• Collective consultation failures can create substantial financial exposure - Protective awards can be made where collective duties are breached, increasing overall redundancy costs. Failing to submit an HR1 form without good cause is a criminal offence that can lead to prosecution and a summary fine.
   
• Poor communication can damage trust and retention - If employees feel the process is rushed or predetermined, you may see increased grievances, sickness absence, and resignations among key staff.
   
• Weak records make it harder to defend decisions - If you cannot show how pools, criteria, and scores were reached, disputes are more likely to escalate and be harder to resolve.
   
• Mishandling maternity or disability issues - Errors around priority vacancies, pregnancy-related absence, or disability-related adjustments can lead to higher-value discrimination claims.

Summary

A compliant redundancy process is not just a legal exercise. It is a people process that requires careful planning, honest communication, and fair decision-making. Employers should be able to explain the business reason, consult openly, select fairly, explore alternatives and handle notice and payments correctly.

For HR professionals, the key is to keep the process structured, consistent and well documented. This helps reduce risk while treating employees with clarity and respect during a difficult period of change.

Further Advice

If you have questions about redundancies or any other employment-related matter, our Peace of Mind Team can provide expert guidance. Our Document Audit Team can also help draft relevant workplace policies.

Contact our Employment Team by emailing employment@warnergoodman.co.uk or calling 023 8071 7717.