Redundancy is a potentially fair reason for dismissal, but only if the employer follows a fair and lawful process. Getting it wrong — even when the redundancy situation is genuine — can result in unfair dismissal claims, discrimination claims, and significant financial exposure. A structured approach is essential.
Step-by-Step Process
1. Establish a Genuine Redundancy
Redundancy exists when the employer's need for employees to carry out work of a particular kind has ceased or diminished (or is expected to). Common triggers include business closure, workplace closure, reorganisation, or reduced demand for certain work.
2. Identify the Pool for Selection
Determine which roles are at risk. The selection pool should include all employees doing the same or similar work — not just the person the employer would prefer to lose. A pool of one is only appropriate when the role is genuinely unique.
3. Apply Fair Selection Criteria
Use objective, measurable criteria to select who is made redundant. Common criteria include skills, qualifications, performance records, attendance, and disciplinary record. "Last in, first out" is no longer considered fair as a sole criterion because it can indirectly discriminate on the basis of age.
4. Consult Individually
Meet with each at-risk employee individually. Meaningful consultation means:
- Explaining the business reasons for the redundancy
- Sharing the proposed selection criteria and how they scored
- Listening to the employee's views and considering alternatives they suggest
- Exploring whether suitable alternative employment exists
5. Collective Consultation (If Applicable)
If proposing to make 20 or more employees redundant at one establishment within 90 days, collective consultation obligations apply — including notifying the Secretary of State.
6. Consider Alternative Employment
Before confirming redundancy, make reasonable efforts to find suitable alternative roles within the organisation (or group). Failure to do so is a common reason for redundancy dismissals being found unfair.
7. Give Notice and Pay
Provide the correct statutory or contractual notice and calculate redundancy pay correctly.
8. Allow Time Off
Employees under notice of redundancy with two or more years' service are entitled to reasonable paid time off to look for new work or arrange training.
Redundancy is one of the areas where employers most frequently face tribunal claims. Our redundancy management service guides you through every step. Get expert support.