Redundancy Process for Employers UK: A Clear Guide for Business Owners
If you’re an employer considering reducing your workforce, understanding the redundancy process for employers UK is absolutely essential. Getting it right protects both your business and your employees — and helps you avoid costly legal claims. In this article, I’ll walk you through the key steps, legal requirements, and common pitfalls, offering practical advice drawn from my experience helping employers every day at EBS Law.
Understanding the Legal Definition of Redundancy and the Redundancy Process for Employers UK
In UK employment law, redundancy arises when a role is no longer needed. This could be due to business closure, changes in business operations, or fewer employees being required to do the same work.
According to gov.uk guidance, redundancy must be genuine. If it’s used as a cover for performance issues or to remove problematic staff, it could amount to unfair dismissal — exposing your business to tribunal claims.
Step-by-Step Redundancy Process for Employers UK
1. Identify the Business Need
Start by confirming the genuine reason for redundancy. Is the business restructuring? Are there financial pressures? Have new technologies made certain roles obsolete?
2. Select the Affected Roles
Be specific about which roles — not individuals — are at risk. You’ll need clear business rationale and evidence to support your decision.
3. Apply Fair Selection Criteria
When choosing which employees may be made redundant, you must use objective and non-discriminatory criteria. Common examples include:
- Skills and qualifications
- Performance records
- Attendance and disciplinary records
Document everything carefully, as this will protect your position if your decision is challenged.
Consultation: A Legal Requirement, Not a Formality
Consultation is a critical part of the redundancy process for employers UK. Failing to consult properly can make an otherwise fair redundancy process unlawful.
Individual vs Collective Consultation
If fewer than 20 employees are affected, you must consult individually. For 20 or more redundancies within a 90-day period, collective consultation rules apply.
This means you must:
- Inform and consult with employee representatives
- Notify the Redundancy Payments Service (RPS)
The minimum consultation period is 30 days (or 45 days for 100+ redundancies).
Providing Suitable Alternatives
Employers have a legal duty to explore suitable alternative employment within the organisation. If an employee unreasonably refuses a suitable role, they may forfeit their right to a redundancy payment.
If you would like advice, John Bloor and the team are here to help. Call John today on 01625 874400 or email enquiries@ebslaw.co.uk.
Calculating Redundancy Pay
Employees with at least two years’ continuous service are entitled to statutory redundancy pay, based on:
- Age
- Length of service (up to 20 years)
- Weekly gross pay (subject to a cap)
You can use the government calculator to estimate this.
Remember, some contracts may offer enhanced redundancy terms. Always check the employment contract and staff handbook.
Issuing Notice and Final Steps
Give Proper Notice
You must give employees the correct notice period, either statutory or contractual (whichever is longer). During this time, you should also offer time off to attend interviews.
Prepare the Paperwork for Redundancy Process for Employers UK
Provide written confirmation of redundancy, final pay details, and any accrued holiday pay. Maintain accurate records throughout the process.
Avoiding Redundancy Process for Employers UK Pitfalls
The redundancy process for employers UK can be legally complex. Common errors include:
- Failing to consult properly
- Unfair selection methods
- Overlooking suitable alternative roles
- Wrong calculations of redundancy pay
These mistakes often lead to costly claims. That’s why working with experienced employment solicitors is so important.
Redundancy Process for Employers UK – How EBS Law Can Help
At EBS Law, we specialise in employment law support for employers. Whether you’re planning a restructure or facing a redundancy dispute, we’re here to guide you through the process with confidence.
Explore our full employment law for employers service to see how we can help protect your business.
Contact John Bloor today for expert support at EBS Law. We offer practical, commercially-minded legal advice tailored to your situation. Call 01625 874400 or email enquiries@ebslaw.co.uk.
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