At Risk Of Redundancy Letter In The UK: What Employers Must Include

Even in healthy small businesses, there are times when you need to reduce headcount - for example, when a key client contract ends, costs rise unexpectedly, or you’re restructuring to keep the business sustainable.

That’s where an at risk of redundancy letter comes in. It’s usually the first formal step in a redundancy process, and it sets the tone for everything that follows. Done well, it helps you run a fair consultation, protect working relationships, and reduce the risk of claims. Done badly, it can create confusion, distress, and legal exposure.

In this guide, we’ll walk through what an at risk letter should include in the UK, when to send it, and the practical steps you should follow as a small business employer to handle redundancies properly.

What Is An At Risk Of Redundancy Letter (And When Should You Send It)?

An at risk of redundancy letter (sometimes called a redundancy at risk letter) is a written notification to an employee that:

• their role (or their position within a selection pool) is being considered for redundancy; and
• you are beginning (or continuing) a redundancy consultation process.

It is not (and shouldn’t read like) a redundancy dismissal letter. In most cases, it’s the start of consultation, not the end of it.

Why This Letter Matters

This letter matters for two key reasons:

• Fair process: A redundancy process should involve genuine consultation. The at risk letter is commonly used to invite the employee into that process and explain what is being proposed (and why).
• Clarity and evidence: If you later need to demonstrate you acted reasonably and fairly, a clear paper trail helps - including a well-written letter, meeting notes, scoring documents, and follow-up correspondence.

When Should You Send It?

You generally send the at risk letter when you’ve identified a potential redundancy situation (for example, reduced need for work of a particular kind, a restructure, or workplace closure), but before you’ve made a final decision on who will be made redundant.

As a practical rule: send it once you can clearly explain the business rationale and the proposed approach, and you’re ready to consult meaningfully (including considering alternatives).

What You Must Include In An At Risk Of Redundancy Letter (UK Checklist)

There isn’t a single mandatory template under UK law, but there are core details you should include so the letter is clear, fair, and supports a lawful process.

Here’s a checklist of what your at risk of redundancy letter should usually cover.

1) A Clear Statement That The Role Is “At Risk” (Not Yet Redundant)

Start by stating that the employee’s role is at risk of redundancy and that no final decision has been made. This helps avoid the impression that consultation is a “tick-box exercise”.

2) The Business Reason For The Proposed Redundancy

Explain the business rationale in plain English. For example:

• a downturn in demand;
• loss of a contract or funding;
• restructuring to remove duplication;
• closure of a site or function; or
• introducing new technology or outsourcing.

You don’t need to overload the letter with financial detail, but you should give enough information for the employee to understand what’s driving the proposal.

3) The Proposed Roles Affected (And The “Pool” If You’re Using One)

If you’re selecting from a group of employees, the letter should explain:

• the selection pool (who is in scope); and
• why that pool has been chosen.

This is a common area where employers get challenged - especially if the pool looks artificially narrow.

4) The Consultation Process And Timeline

Set expectations about what will happen next. For example:

• that you will hold consultation meeting(s);
• the proposed date, time, and location of the first meeting (or that it will be scheduled shortly);
• who will be present (manager/HR); and
• that the employee can raise questions, suggest alternatives, and comment on scoring/selection.

If you’re in a situation involving larger-scale redundancies (for example, 20+ employees at one establishment), you may also need a collective consultation process under the Trade Union and Labour Relations (Consolidation) Act 1992. The timing and content requirements differ, so it’s worth getting advice early. The timeframes are discussed in redundancy consultation planning.

5) Being Accompanied At Meetings (What To Offer)

In the letter, it’s common (and good practice) to confirm the employee may bring a colleague or trade union representative to consultation meetings.

However, the strict statutory “right to be accompanied” under section 10 of the Employment Relations Act 1999 generally applies to disciplinary and grievance hearings, and not to redundancy consultation meetings. Even so, allowing accompaniment is often sensible to help the process feel fair and supported.

6) The Selection Criteria (If Applicable)

If selection scoring will be used, include (or attach):

• the selection criteria headings (for example, skills, performance, qualifications, disciplinary record, attendance - carefully considered);
• how scoring works; and
• that the employee will have an opportunity to comment on their scores.

Be cautious with criteria that could indirectly discriminate (for example, disability-related absence). This is one reason it’s important your broader staff handbook and policies are consistent and legally reviewed.

7) A Genuine Commitment To Explore Alternatives

Redundancy should not be your only “option” on paper. Make clear you will consider alternatives, such as:

• redeployment into a suitable alternative role;
• reducing overtime or contractor reliance;
• freeze on hiring;
• temporary lay-off/short-time working (only if you have contractual rights);
• retraining; or
• voluntary redundancy (where appropriate).

8) Practical Next Steps And Contact Point

End the letter with practical next steps, including who the employee should contact with questions, and (if appropriate) enclosing documents such as a proposed structure chart, selection matrix, or information pack.

How To Run The Redundancy Process Properly After Sending The Letter

Once you send a redundancy at risk letter, the key is to follow through with a process that is fair, consistent, and well-documented.

While each business is different, here’s a practical framework small business employers often follow.

Step 1: Prepare Your Rationale And Documents Before You Consult

Before the first meeting, you should be able to clearly explain:

• what has changed in the business (and why redundancy is being proposed);
• which roles are affected;
• how selection will work (if selection is needed); and
• what alternatives you’ve already considered.

If your documentation is messy or inconsistent, it becomes much harder to show the decision-making was reasonable.

Step 2: Hold Meaningful Consultation Meetings

Consultation should be a real discussion. In practice, that means you should:

• explain the proposal and the business reasons;
• invite feedback, questions, and counter-proposals;
• discuss potential alternative roles;
• where scoring applies, share and discuss scores; and
• keep written notes of what was said and agreed.

One common mistake is rushing to a final decision too quickly. Even where redundancies feel inevitable, consultation needs to be enough to show you genuinely considered options and listened.

Step 3: Apply Selection Criteria Fairly And Consistently

If you need to select between employees, it’s usually safer to use objective, job-related criteria and apply them consistently across the pool.

It’s also wise to sanity-check scoring for potential bias. If two people score very differently, make sure the evidence supports it (for example, appraisal records, qualification documents, or measurable skills assessments).

Any performance records you rely on should ideally align with your existing approach to managing performance (for example, your documented approach to PIPs if performance has historically been raised).

Step 4: Consider Suitable Alternative Employment (Seriously)

Alternative roles are often where disputes arise, especially in small businesses where people “wear multiple hats”.

If there is a role the employee could do with reasonable training, consider whether it might be suitable alternative employment. If you dismiss without properly exploring this, you can increase risk.

Also, if you’re buying or selling a business or changing service providers, redundancies may overlap with TUPE issues - which is a very different legal framework. If that’s on your radar, it’s worth reviewing the TUPE transfer steps early.

Step 5: Confirm The Outcome In Writing (And Handle Notice Correctly)

If, after consultation, redundancy is confirmed, you should issue a separate written outcome/termination letter setting out:

• the decision and termination date;
• notice (or pay in lieu of notice if contractually allowed);
• redundancy pay (if applicable);
• any accrued but unused holiday pay; and
• the right of appeal.

Notice can be a technical area - contractual notice, statutory notice, and what your contract allows you to do all matter. It’s worth double-checking redundancy notice periods so you’re not caught out by timing issues.

If you’re unsure whether your current employment contract wording supports what you plan to do (especially around PILON, lay-off clauses, or mobility), get that checked before you proceed.

Common Mistakes Small Businesses Make With At Risk Letters (And How To Avoid Them)

A well-run redundancy process is often less about “perfect paperwork” and more about avoiding a few high-risk pitfalls.

Here are some common mistakes we see small businesses make with an at risk of redundancy letter and the process around it.

Using The Letter As A “Decision Letter”

If your at risk letter reads like a termination notice, it undermines the idea of consultation. Keep the language genuinely provisional and focused on the proposal and process.

Vague Or Generic Business Reasons

“Business needs” is not very meaningful on its own. You should explain what has changed (for example, reduced workload, restructure, site closure). If the rationale is too thin, the employee may argue the redundancy wasn’t genuine or the process wasn’t fair.

Not Explaining The Selection Pool

If only one person is in the pool, you should be able to explain why. If the pool is wider, explain why those roles are comparable and why others aren’t included.

Scoring Without Evidence

Scoring must be defensible. If you can’t point to evidence, it becomes “opinion scoring”, which is harder to justify if challenged.

Overlooking Discrimination Risks

Redundancy processes can unintentionally create discrimination risks (for example, using absence data that relates to disability, or scoring that penalises part-time workers indirectly).

If something feels sensitive, it’s better to get advice early than to “hope it’s fine” and deal with a complaint later.

Not Keeping A Paper Trail

Keep copies of:

• the at risk letter and any attachments;
• meeting invites and notes;
• selection criteria and scoring documents;
• employee feedback and your responses; and
• the final outcome letter.

Good records help you manage the process confidently, respond to questions consistently, and reduce the chance of misunderstandings.

Do You Need A Template At Risk Of Redundancy Letter (Or Legal Help)?

It’s tempting to search for a quick template and move on - but redundancy letters (and the process behind them) are rarely “one size fits all”.

For example, the right approach can change depending on:

• whether you’re selecting from a pool or making a whole function redundant;
• how many redundancies are proposed (collective consultation thresholds matter);
• whether there are alternative roles available;
• whether any employees are on leave (for example, maternity leave) or have protected characteristics; and
• what your contracts and policies say (and what they don’t say).

Getting tailored advice early can save a lot of stress later - and can help you avoid a redundancy process that drifts into dispute territory. If you’re already dealing with grievances or conflict alongside the restructure, it can also help to align your approach with a fair workplace investigation process, where relevant.

If you’d like support with the redundancy process end-to-end (including preparing the at risk of redundancy letter, consultation plan, scoring matrix and outcome letters), tailored redundancy advice can help you move forward with confidence.

Key Takeaways

• An at risk of redundancy letter is usually the first formal step in a redundancy process - it should notify the employee they’re at risk and invite genuine consultation, not announce a final decision.
• Your redundancy at risk letter should clearly explain the business reason for redundancy, who is affected (including the selection pool where relevant), what consultation will look like, and what happens next.
• If you are using selection criteria, include or attach the criteria and explain how scoring will work - and make sure scores are supported by evidence and applied consistently.
• Consultation should be meaningful: you need to listen, consider alternatives (including suitable alternative roles), and keep clear written records of meetings and decisions.
• Be careful with timing, notice, and collective consultation obligations - and check your contracts and policies before making commitments in writing.
• Because redundancy processes are fact-specific, getting tailored legal advice early can reduce risk and make the process smoother for everyone involved.

If you’d like help drafting an at risk of redundancy letter or running a fair redundancy process, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.