How to Make Someone Redundant Fairly and Avoid Tribunals

Redundancy process: a calm, fair guide for UK SMEs

Picture this. You are staring at the numbers and the room feels smaller than it did last week. You have to start a redundancy process and your stomach drops. Here is the good news. A fair, well run redundancy process protects your business and treats people with dignity. This guide gives you the redundancy process in plain English, with steps you can follow today.

Quick answer on the redundancy process

• Do this: make sure the redundancy is genuine, set a fair pool, score with objective criteria, and consult before any decision.
• Avoid this: using redundancy to dodge performance, pre‑deciding outcomes, or skipping consultation.
• Write down: the business reason, the pool, the scores, every consultation meeting, and the final decision with pay.

Tip: In most tribunal cases the reason for redundancy was fine. The process sank the employer. Get the redundancy process right and you lower risk for everyone.

Is it a genuine redundancy?

A redundancy is genuine only if the work has gone or reduced. In law, that means one of:

• the job is no longer needed
• the need for that kind of work has reduced
• the workplace is closing
• the business is closing

Redundancy is not a neat fix for conduct or capability. If the real issue is performance, use a performance process. Dressing it up as redundancy is a sham and tribunals spot it.

Useful reading:

• ACAS guide to managing redundancies
• GOV.UK redundancy pay and rights

Before redundancy: sensible alternatives

Genuine does not mean inevitable. Show you considered options such as:

• reduce overtime or agency spend
• temporary cut in hours or short‑time working, if contracts allow
• redeployment into a different role
• a recruitment freeze
• asking for volunteers

Even if none work, showing you tried is fair and strengthens your defence.

Redundancy process step‑by‑step

Step 1: Identify the pool

Decide which roles are affected. That is your selection pool. Do not define it so tightly that it lands on one person by design. If three people do the same work and only two roles remain, your pool is all three.

Step 2: Set fair, objective criteria

If the pool is bigger than the jobs left, you need criteria that are:

• objective and linked to the role
• evidenced, not a hunch
• non‑discriminatory

Workable criteria:

• skills and qualifications
• relevant experience
• standard of work and performance backed by data
• disciplinary record used with care

Avoid anything that punishes a protected group. Last in, first out used alone risks age bias. Scoring absence can hit disability or pregnancy without careful adjustments.

Step 3: Consult before you decide

Consultation is the heart of a fair redundancy process. It must be real, two‑way, and before any final decision.

• Under 20 proposed redundancies: no fixed minimum period, but consultation still must be genuine and pre‑decision.
• 20 or more at one establishment within 90 days: collective consultation rules apply. Minimum 30 days, rising to 45 days for 100 or more. You must notify using HR1 before consultation starts.

Explain the business reason, share criteria, listen to ideas, and consider them. If someone suggests a workable alternative, think it through and respond.

Collective consultation and HR1:

• HR1 advance notification form

Step 4: Look for suitable alternative employment

Offer any suitable vacancies before confirming redundancy. Employees on maternity, adoption or shared parental leave have priority for suitable roles. Use a trial period for new roles so both sides can test the fit.

Step 5: Confirm decision, notice and pay

If redundancy is confirmed after fair consultation, write to the employee setting out:

• notice period under statute or the contract, whichever is higher
• statutory redundancy pay if they have at least two years' service, based on age, service, and capped weekly pay

Always check the current cap and use the official calculator:

• GOV.UK redundancy pay

If you plan to require holiday to be taken in notice, your contract must allow it. Now is a smart time to review contract wording.

Step 6: Offer an appeal

There is no hard legal rule to offer an appeal, but ACAS expects fairness. An appeal can catch problems early and it reads well if the case ever reaches a tribunal.

Risks, protected employees and common mistakes

Protected employees

Extra care is needed for:

• anyone pregnant or on maternity, adoption or shared parental leave. They have priority for suitable alternatives. A protected period now runs for 18 months after birth. See our guide: Maternity and family leave guide
• anyone on long‑term sick leave. They must still be consulted
• anyone with a protected characteristic where criteria or selection could discriminate

Common mistakes and the fix

• Sham redundancy that hides performance. Fix: use the performance route.
• Pool of one picked to fit the answer. Fix: include everyone doing the same work.
• Subjective or discriminatory scoring. Fix: use objective, evidenced criteria.
• Deciding first, consulting later. Fix: consult before any decision.
• Treating under‑two‑years staff as no‑risk. Fix: discrimination and automatic unfair dismissal need no service.
• Thin paperwork. Fix: keep the reason, pool, scores, minutes, offers and decision.

Settlement agreements

A settlement only works through a proper, signed agreement with independent legal advice for the employee. An informal cash top‑up without an agreement does not stop a claim. Get advice before you choose this route.

Paperwork, pay and what to write down

Notice, redundancy pay and benefits

Set out in writing:

• notice period and whether it is worked or paid in lieu
• statutory redundancy pay if eligible, and how it was calculated
• holiday position, benefits, equipment return, and any agreed support

Your documentation checklist

Keep a clean file with:

• the business reason and alternatives considered
• the pool and why you drew it that way
• the selection criteria and each individual score
• minutes of every consultation meeting with points raised and responses
• any suitable alternative roles offered and the response
• the final decision, notice, redundancy pay calculation, and any appeal outcome

This file is your defence. It is cheaper than a tribunal.

What is changing in 2025 and what to do now

Employment Rights Act 2025

Two changes matter for SMEs:

• Collective consultation thresholds may be counted across the business, not just per site. More employers could fall into collective rules.
• Unfair dismissal is expected to become a day-one right. The two-year qualifying period would go for ordinary unfair dismissal.

These measures are expected, with detail to follow in regulations. The practical move is simple. Run a fair redundancy process for everyone now, regardless of service. Check ACAS and GOV.UK updates before you act.

What to do now

• Sense a restructure coming up? Book a Free HR Health Check and sort contracts, wording and risks before you start.
• Mid‑process and feeling shaky? Book a discovery call and we will steady the ship.
• Hands‑on help through a live redundancy: our HR Protect and HR Advice Line give you practical support and documents without the panic.

Keep it human, keep it fair, and keep your paperwork tidy. Kettle on. Standards up. And as ever, take care of your people.

FAQs

• What is the first step in a fair redundancy process?
• How long should consultation last for a small business?
• Can I use absence as a selection criterion?
• Do I have to offer suitable alternative employment?
• What redundancy pay is my employee entitled to?
• Do employees have a right to appeal a redundancy decision?