A Brief Redundancy Guide with Key Information for Your Business
Making redundancies is one of the hardest decisions a business can face. That’s why we’ve created this quick-reference redundancy guide to help employers safeguard their businesses.
Redundancies are rarely about numbers alone. They affect livelihoods, morale, reputation and the long-term health of your organisation. For many employers, the fear is not just about making roles redundant, but about getting the process wrong and ending up in an employment tribunal.
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With employment law continuing to evolve, and significant changes on the horizon from 2026 onwards, it has never been more important to approach redundancies carefully, lawfully and humanely. In this redundancy guide, we explain how redundancies work, what tribunals expect to see, and how upcoming legal changes may raise the stakes even further. It’s for UK employers and business owners who want to do the right thing while protecting their organisation.
When Do Redundancies Arise?
Redundancy is not about an individual employee. It is about the role. A genuine redundancy situation arises where there is a reduced need for employees to carry out work of a particular kind, where a workplace closes, or where a business restructures due to economic, technological or operational change.
Common scenarios include a downturn in work, the loss of a major contract, automation, or new technology replacing tasks. Redundancies also commonly follow a business merger, or a reorganisation designed to keep a business competitive. While these reasons may be commercially sound, the legal focus is always on whether the redundancy is genuine and whether the process has been handled fairly.
Tribunals look closely at the employer’s reasoning. If redundancy is used as a cover for poor performance management, personality clashes or cost-cutting targeted at specific individuals, the risk of unfair dismissal claims increases significantly.
What Does the Law Currently Require?
Under UK employment law, employers must follow a fair redundancy process. This includes identifying a genuine redundancy situation, consulting with affected employees, and using fair and objective selection criteria. It’s also important to consider suitable alternative employment where possible.
Consultation is a legal requirement, not a courtesy. Even where only one role is at risk, meaningful consultation must take place. Employees must understand why redundancy is being considered, how they have been selected, and whether there are alternatives.
Where 20 or more redundancies are proposed at one establishment within a 90-day period, collective consultation obligations apply. This includes consulting with employee representatives and notifying the Secretary of State.
Failure to follow a fair process can result in unfair dismissal claims, protective awards, discrimination claims and serious reputational damage.
The Human Side of Redundancy
While compliance is essential, tribunals also expect employers to behave reasonably and compassionately. Redundancy is often a shock to employees, even when business difficulties are well known.
Employers who communicate openly, explain decisions clearly and treat people with dignity are far less likely to face disputes. Whereas, silence, rushed decisions and poorly explained processes often lead to grievances, appeals and claims.
It is worth remembering that how redundancies are handled affects not only those leaving, but those staying behind. Survivors of redundancy exercises often experience reduced trust, lower engagement and increased stress if the process feels unfair or opaque.
Selection Criteria and Fairness
Selection criteria should be objective, measurable and applied consistently. Common criteria include skills, qualifications, performance records and disciplinary history. Subjective scoring without evidence is a common weakness in tribunal cases.
Employers should avoid criteria that could indirectly discriminate without justification. Such as length of service, or criteria that disadvantage those with protected characteristics. For example, using sickness absence without adjustment for disability related absence can be unlawful.
Employees must be given the opportunity to challenge their scores during consultation. A redundancy process is rarely fair if decisions are presented as final without discussion.
What If an Employee Challenges the Redundancy?
Challenges often arise where employees feel they were singled out, where consultation felt tokenistic, or where alternative roles were not properly explored. A well-documented process is your strongest protection.
This includes written business reasons, consultation notes, scoring matrices, evidence supporting scores, and records showing alternatives were genuinely considered. Tribunals expect employers to show their workings, not just their conclusions.
Upcoming Changes That Will Affect Redundancies
Employers also need to plan for significant changes to employment law that will alter the redundancy landscape over the next few years.
From April 2026, the maximum protective award for failing to comply with collective consultation obligations is set to increase from 90 days to 180 days. This doubles the financial exposure for employers who get collective redundancy wrong.
Looking further ahead, from January 2027 the qualifying period for unfair dismissal is expected to reduce from two years to six months. This means many more employees will have the right to challenge redundancies at tribunal, including newer hires who are currently excluded.
There are also proposed changes to how establishments are defined for collective redundancy purposes, with each employing entity being treated as one establishment. This may bring more redundancy exercises within collective consultation thresholds.
Taken together, these changes mean that informal or rushed approaches to redundancy will carry much higher risk.
Redundancy and Fire and Rehire Risks after the 2026 Employment Law Updates
Redundancies sometimes overlap with contractual changes. Employers may be tempted to restructure roles and impose new terms to avoid redundancies. However, upcoming reforms to fire and rehire practices will significantly restrict this approach.
From October 2026, dismissing and re-engaging employees on worse terms will be automatically unfair in many cases, unless a strict financial necessity test is met. Changes to pay, hours, pensions and holidays are expected to fall squarely within these restrictions.
This makes early legal advice critical when redundancies and contractual changes intersect.
Supporting Employees Through the Process
Employers who manage redundancies well often go beyond the minimum legal requirements. This may include offering enhanced redundancy pay, providing outplacement support, allowing time off to attend interviews, or offering counselling support.
While not legally required, these steps can reduce conflict, protect morale and demonstrate that the business has acted responsibly. Tribunals often take a dim view of employers who treat redundancy as a purely transactional exercise.
The Role of Strong HR Policies
Redundancy processes do not sit in isolation. They are underpinned by broader HR policies that cover consultation, grievances, appeals, flexible working and equality.
Businesses with up-to-date policies and clear procedures are far better placed to respond calmly and consistently when redundancies arise. Those without them often scramble under pressure, increasing the risk of mistakes. It's not uncommon to see tribunal claims where the underlying issue is not the redundancy itself, but the absence of a clear framework guiding managers through the process.
We Offer So Much More than this Redundancy Guide
Our Business Employment Law team works closely with employers to manage redundancies safely and strategically. We advise on planning, consultation, selection, documentation and communication, helping you reduce legal risk while treating your people fairly.
Through our myHR service employers benefit from ongoing access to legal advice, regularly updated policies and practical support when difficult situations arise. This is particularly valuable as employment law continues to change.
We also offer a 24-month HR policy guarantee, giving businesses confidence that their policies remain compliant as new legislation comes into force. With major reforms on the horizon, this reassurance is more important than ever.
Safeguard Your Business
Redundancies are never easy, but they do not have to be chaotic or adversarial. A well planned, transparent and compassionate approach protects your business and the people who work within it.
With tribunal risks increasing and legal protections expanding, now is the time to review your redundancy processes and HR framework. If you are considering redundancies, or want to ensure you are prepared for the future, early advice can make all the difference.
If you would like to speak to our Business Employment Law team about redundancies, myHR, or our 24-month HR policy guarantee, Winston Solicitors is here to help.
Message the Employment Law team at employment@winstonsolicitors.co.uk
