In Brief: Redundancy Rules for Employers
UK employers must follow a fair and reasonable redundancy process, even when making fewer than 20 redundancies. A genuine business reason must be identified and clearly explained, with employees placed formally “at risk” and consulted meaningfully before any final decision is made. Consultation should involve at least two meetings where possible, the use of objective selection criteria where roles are similar, and proper consideration of alternatives such as redeployment. Employers should keep clear written records throughout and conclude the process with a detailed outcome letter confirming notice, pay, and appeal rights. A structured approach protects both the business and its people.
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A Practical Guide for Small UK Businesses
Redundancy is one of the most challenging processes an employer can face – both operationally and emotionally. When handled incorrectly, it exposes organisations to legal risk, employee grievances, and significant reputational damage. When handled well, it protects the business, supports employees through change, and ensures compliance with UK employment legislation.
This guide breaks down the redundancy rules for employers in a clear, practical way, especially for small organisations managing redundancy for less than 20 employees, where collective consultation rules do not apply. We’ll walk through the essential steps, including consultation, documentation, selection criteria, and what to do if an employee refuses to attend a redundancy consultation meeting.
What Is a Redundancy?
A redundancy arises when an employer needs fewer employees to carry out work of a particular kind. Common reasons include:
- Organisational restructure
- Closure of a site, department, or the entire business
- Cost-saving requirements
- New technology reducing the need for manual roles
Understanding the reason – and being able to evidence it – is the foundation of a lawful redundancy process.
Following Fair Redundancy Rules for Employers
UK employment law requires every employer to follow a fair and reasonable process. For employers handling redundancy of less than 20 employees, this usually includes:
- Identifying the business rationale for redundancy.
- Placing employees at risk and issuing a formal redundancy notice letter.
- Running a fair consultation process, including at least one meeting – though two or more is best practice.
- Using objective redundancy selection criteria, where applicable.
- Exploring alternatives to redundancy, such as redeployment.
- Issuing a final outcome letter and confirming notice, pay, and the right to appeal.
A fair process is not optional – it’s essential. Even businesses with employees of fewer than two years’ service, should follow a fair process to reduce claims of discrimination or procedural unfairness.
Understanding the UK Redundancy Consultation Period
For small businesses with redundancy of less than 20 employees, there is no legally mandated minimum consultation period. However, employers must still conduct meaningful consultation.
What does meaningful consultation look like?
- Giving employees advance warning that their role is at risk
- Sharing clear reasons for the proposed redundancy
- Allowing employees to ask questions and suggest alternatives
- Genuinely considering alternatives before making a final decision
Most small employers choose a redundancy process timeline of 2–3 weeks, though this can vary depending on complexity, number of employees, and availability for meetings.
The Redundancy Consultation Meetings
The First Consultation Meeting
The purpose of the first meeting is to:
- Explain that the employee is at risk
- Provide the business rationale
- Present the selection criteria (if applicable)
- Share the proposed redundancy process timeline
- Allow the employee to bring questions or concerns
- Provide the initial redundancy notice letter confirming “at risk” status
Employers should give the employee enough time before the meeting to review documents and prepare questions.
If an Employee Refuses to Attend a Redundancy Consultation Meeting
It’s not uncommon for employees to avoid meetings due to anxiety, disagreement, or misunderstanding. But consultation must still happen.
If an employee refuses to attend a redundancy consultation meeting:
- Offer alternative dates and times.
- Offer a virtual meeting if appropriate.
- Allow them to submit questions in writing.
- Confirm in writing that the meeting will proceed in their absence if they decline again.
As long as the employer shows they’ve made reasonable efforts, the process can continue
The 2nd Consultation Meeting (Redundancy)
The second meeting gives employees the opportunity to:
- Respond to the information shared in the first meeting
- Discuss alternatives (retraining, redeployment, job-sharing, reduced hours, etc.)
- Review their scoring if redundancy selection criteria are being used
- Provide any new information that may affect the decision
Employers should genuinely consider feedback. This meeting is key to demonstrating fairness if the redundancy decision is later challenged.
Additional Meetings (Optional but Recommended)
Some employers hold a third meeting, especially when the situation is complex or involves multiple employees. Additional meetings can help:
- Clarify unanswered questions
- Document the consideration of alternatives
- Strengthen the fairness of the process
Using Fair Redundancy Selection Criteria
If multiple employees perform similar roles, employers must use fair and objective redundancy selection criteria.
Examples include:
- Performance
- Skills, competencies, and qualifications
- Disciplinary record
- Attendance record (excluding absences related to pregnancy or disability)
- Flexibility (ability to work across different tasks or shifts)
Both the criteria and scoring methodology should be shared with employees during consultation.
The Redundancy Notice Letter
Once consultation is complete and alternatives have been reviewed, employers may issue a final redundancy notice letter. This should include:
- Confirmation that redundancy is now the final decision
- The employee’s notice period
- Details of statutory or enhanced redundancy pay
- Annual leave entitlement and final salary arrangements
- Termination date
- Right to appeal
A clear and well-structured redundancy notice letter helps demonstrate procedural fairness and reduces misunderstandings.
Redundancy Process Timeline Example
Here’s a simple example for redundancy of less than 20 employees:
Week 1:
- Announce proposal
- Issue “at risk” redundancy notice letter
- Hold first consultation meeting
Week 2:
- Score employees (if required)
- Offer individual review
- Hold the 2nd consultation meeting (redundancy)
Week 3:
- Final meeting (optional)
- Issue outcome letter
- Begin notice period
The timeline can be longer if needed – the key requirement is that consultation must be genuine, not a tick-box exercise.
Final Steps: Notice, Pay, and Support
Employees with two or more years’ service are entitled to:
- Statutory redundancy pay
- Statutory notice, or contractual notice if higher
- Payment for accrued annual leave
Even though redundancy is a business decision, supporting employees through the transition – through references, job-search support, or career coaching – can help preserve goodwill and employer reputation.
Conclusion
Understanding redundancy rules for employers is vital for avoiding costly mistakes and ensuring a respectful, legally compliant process. Whether dealing with a large restructure or redundancy of less than 20 employees, fairness and transparency should guide every step.
A well-managed process includes clear communication, meaningful consultation, objective redundancy selection criteria, and well-structured documentation – from the initial “at risk” notification to the final redundancy notice letter.
If you need help designing, managing, or safeguarding your redundancy process, Wright People HR can support you at every stage to ensure compliance, fairness, and peace of mind.
Contact us today to discuss how we can assist your organisation with Redundancy guidance or any other HR issues.
