A Complete Guide to UK Redundancy Laws: The Legal Steps for Making Staff Redundant

Let’s face it-making someone redundant is one of the toughest decisions you’ll ever have to make as a business owner in the UK. Whether you’re facing a downturn, restructuring, or just looking to streamline operations, the legal steps involved can feel overwhelming. But here’s the good news: with the right preparation and a fair, methodical process, you’ll not only comply with the law but also safeguard your business against costly disputes. Redundancy law in the UK is all about ensuring employees are treated fairly-while giving employers a clear process to follow. If you’re searching for practical advice on laws regarding redundancy UK or simply wondering “How do you make someone redundant?”-this guide will walk you through the essentials, step by step. From what counts as a genuine redundancy to the correct way to consult and pay staff, we’ll cover everything you need to know. It might not make the process easy emotionally-but you’ll feel confident you’re ticking the right legal boxes. Ready to get clear on your obligations and avoid those unfair dismissal claims? Keep reading for your complete roadmap to making staff redundant the right way in the UK.

What Is a Genuine Redundancy?

Let’s start at the beginning: for a redundancy to be lawful, it must be genuine. In other words, it’s the role that is no longer needed-not simply using redundancy to exit a troublesome employee. UK law (primarily the Employment Rights Act 1996) is clear on this point. A redundancy is typically genuine when it is due to:

• A business closing (completely or at a specific location)
• The need for employees to do certain work ceases or diminishes
• Business restructuring or changes in how work is done (think: automation or mergers)

If you’re considering making someone redundant, you’ll need evidence that the role itself no longer exists. That could include a revised organisational chart, budget figures showing the need to cut costs, or business plans demonstrating a change in direction. Why does this matter? If you dismiss a person for performance issues or misconduct and label it “redundancy”, you’re on shaky legal ground-and opening yourself up to claims of unfair dismissal or discrimination. Always keep clear records of your business rationale behind redundancies.

What Are the Legal Steps for Making Staff Redundant?

Now to the all-important process. UK redundancy law is grounded in procedural fairness-meaning it’s not just about the reason for redundancy, but how you go about it. Here’s what you need to get right:

1. Identify the Business Rationale and At-Risk Roles

Begin with a business case-what’s changed, and which roles are genuinely affected? Make sure you’re targeting positions rather than individuals. It helps to document:

• Business conditions (e.g. reduced demand, restructuring, technology changes)
• The roles and departments affected
• Why the work in that area is genuinely reducing or changing

Pro tip: Stay objective here and avoid including personal issues or performance-based reasons-those aren’t valid grounds for redundancy.

2. Follow a Fair Selection Process

If you have several people in similar roles, you’ll need a transparent, fair method for choosing who is selected for redundancy. Typical selection criteria (applied objectively) might include:

• Skills, qualifications, and experience
• Length of service (“last in, first out”-though not always best practice now)
• Performance records (provided these are documented)
• Attendance or disciplinary records (where relevant and not discriminatory)

Avoid criteria that directly or indirectly discriminate on the basis of age, gender, race, disability, pregnancy, or other protected characteristics. If you’re unsure, get legal advice before finalising your list.

3. Begin the Consultation Process

This is a step businesses often rush-but it’s legally mandatory to consult with staff before confirming redundancies. Individual Consultation: If you’re making fewer than 20 redundancies in a 90-day period, you must still meet with each affected employee. The aim is to:

• Set out the business reasons behind the proposed redundancy
• Discuss the process, timescales, and selection criteria
• Listen to their views, suggestions, or objections
• Explore alternatives (such as redeployment or retraining)

You’re not required by law to find an alternative-but you must show you’ve genuinely explored possibilities. Collective Consultation: If 20 or more jobs are at risk at one site within 90 days, you must follow strict “collective consultation” rules. This involves:

• Consulting with elected employee representatives or a recognised trade union
• Notifying the Department for Business, Energy & Industrial Strategy (BEIS) in advance
• Consulting for at least 30 days (20-99 redundancies) or 45 days (100+ redundancies) before the first dismissal happens

Failing to follow these rules can lead to expensive protective awards and other penalties, so don’t skip this step if you’re doing a large-scale redundancy. For more on best practices in the workplace, check our guide to staff handbooks and workplace policies.

4. Decide on Dismissals and Provide Proper Notice

Once you’ve completed consultation and considered employee feedback, you can formally confirm redundancies. Here’s what to do:

• Issue written notice to each redundant employee, stating their end date
• Follow notice periods specified in their employment contracts or (at minimum) statutory notice periods (see below)
• Provide clear information on redundancy pay, benefits, and next steps

You must pay employees for their notice period or in lieu (i.e. a lump sum instead of working their notice), depending on business needs and what’s in the contract.

How Do Redundancy Consultations Work?

Consultation can feel daunting, both for you and for the staff affected. But approach it as a genuine conversation rather than a box-ticking exercise, and you’ll avoid most legal pitfalls.

What Should Be Covered in Redundancy Meetings?

• The business reasons for redundancy and how their role is affected
• The selection process used (if applicable)
• Potential alternatives to redundancy (like alternative roles, job sharing, or changing hours)
• An opportunity for the employee to respond, ask questions, or offer suggestions
• Clear explanation of redundancy pay, notice, and the timeline ahead

It’s good practice to undertake more than one meeting, giving the employee time to digest the news and respond. You should keep clear notes of what’s discussed-these records will be crucial if there’s ever a dispute or tribunal claim. If you’d like a deeper dive into making an employee redundant in the UK, our detailed article features practical checklists and more examples.

Who Is Entitled to Redundancy Pay?

Once roles are being made redundant, you need to know who qualifies for redundancy pay. The basic rule: employees with at least two years’ continuous service are entitled to statutory redundancy pay (unless you offer better terms in the contract). Statutory redundancy pay depends on:

• The employee’s age
• Length of continuous employment (up to 20 years)
• Their weekly pay (subject to a statutory cap)

As of April 2024, the caps are:

• £700 per week (statutory maximum)
• £21,000 total (statutory max redundancy payment)

The payment calculation is:

• 0.5 week’s pay for each full year of service under age 22
• 1 week’s pay for each full year of service aged 22-40
• 1.5 week’s pay for each full year over age 41

There’s a handy redundancy calculator on gov.uk to check exact figures and ensure you’re correct. Remember, some employees may also be entitled to enhanced or contractual redundancy pay-check all relevant employment contracts for any extra rights.

What Are My Obligations for Notice Periods?

All employees are entitled to statutory minimum notice periods (unless their contract provides more). These are:

• At least 1 week’s notice if employed between 1 month and 2 years
• 1 week’s notice for each year of service (up to 12 weeks) if employed for more than 2 years

If the contract states a longer notice period, you must honour it. You may offer pay in lieu of notice if the employment ends immediately, or require employees to work their notice. Always document what’s agreed-in writing. If you need help amending or reviewing employment contracts for redundancy or other changes, Sprintlaw’s contract amendment service can make the process smooth and compliant.

What Are the Main Risks When Making Someone Redundant?

Even when you do everything right, redundancy is still a legal risk zone. The key risk areas are:

• Unfair dismissal claims: Especially if the process is rushed, doesn’t include consultation, or redundancy is not genuine.
• Discrimination claims: If selection is based on (or appears influenced by) protected characteristics-like pregnancy, age, disability, or gender.
• Procedural mistakes: Failing to consult, using unclear criteria, or not paying the correct redundancy pay or notice period.

Get in touch with a legal team at any signs of issues, such as:

• Disputes about seniority, selection, or alternative jobs
• Employees raising grievances or complaints
• Complex contract clauses (like enhanced redundancy or share options)

For more tips on protecting your business and minimising dispute risk, our performance management guide explains how careful processes keep your workplace legally compliant and fair.

How Can I Minimise the Impact of Redundancy on My Business?

While no redundancy is ever painless, being open and transparent goes a long way. Here are practical suggestions:

• Communicate early and honestly about business challenges
• Consult meaningfully-listen and consider alternatives suggested by staff
• Offer additional support (e.g. CV workshops or job search help)
• Provide clear guidance about final pay, accrued leave, and other entitlements
• Keep comprehensive records at every step of the process

You might also want to review your commission agreements, policies on leave and entitlements, or consider updating your workplace policies as part of a broader HR review.

Key Takeaways: How to Make Someone Redundant Legally and Fairly in the UK

• Redundancy must be genuine: Only carry out redundancies where a specific role truly isn’t needed.
• Always follow a fair and transparent selection process based on objective criteria.
• Consultation is essential-both for individual and collective redundancies (20+ roles), and must offer a chance for feedback and alternatives.
• Employees with two years’ service are generally entitled to statutory redundancy pay and minimum notice periods-always check contracts for enhanced rights.
• Keep clear records and documentation at every step of the redundancy process.
• Avoid discrimination when selecting roles and always apply criteria fairly.
• If in doubt, seek legal advice early on to avoid tribunal claims and costly mistakes.

Need Help Navigating Redundancy?

Dealing with redundancy is tough-both emotionally and legally. But you don’t need to do it alone. Sprintlaw’s friendly legal team can help you review your process, draft essential documents, and answer your questions about laws regarding redundancy UK-wide. Whether you need to update your contracts, check your redundancy pay calculations, or just want some peace of mind, we’re here for you. If you would like a consultation on your options moving forward, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.