Redundancy: running a fair, defensible process from selection to payout

What makes a redundancy genuine

A dismissal is only a redundancy in law if it meets a specific statutory definition: the employer has ceased, or intends to cease, the business (or the work at that location); or the requirements of the business for employees to do work of a particular kind have ceased or diminished, or are expected to. In plain terms — the role has genuinely gone or reduced, not the person. This distinction matters enormously: using "redundancy" as a route to remove a specific underperforming individual, while the role itself continues (perhaps under a different job title), is not a genuine redundancy and is one of the most common ways an otherwise procedurally tidy process still ends up as an unfair dismissal finding.

Consultation — the step most often skipped or rushed

Consultation obligations scale sharply with numbers, and the trigger point catches smaller employers out because it applies per establishment, within a rolling 90-day window, not per company overall:

Collective consultation must be with recognised trade union representatives or elected employee representatives — not simply a series of one-to-one conversations — and must cover ways of avoiding the redundancies, reducing the numbers affected, and mitigating the consequences, genuinely open to changing the outcome rather than presenting a decision already made. Separately, failing to notify the Secretary of State (via an HR1 form) for collective redundancies above these thresholds is itself a criminal offence — easy to overlook when the HR focus is entirely on the employee-facing process.

Below 20, there's no fixed statutory consultation period, but a fair process still requires meaningful individual consultation — explaining the proposal, the reasoning, the selection criteria, and giving the employee a genuine chance to respond and suggest alternatives, before a final decision is made. "Consultation" that happens after the decision is effectively final is the single most common reason an apparently well-run small-employer redundancy is found unfair.

Selecting who goes — objectively, not by feel

When redundancy affects some but not all of a role, employees at risk must be selected using objective, measurable criteria applied consistently, not management's general impression of who's more valuable. A defensible selection pool and criteria set typically includes:

• Defining the correct selection pool first — everyone doing broadly similar work, not a pool drawn narrowly enough to point at one individual.
• Skills and qualifications relevant to the remaining work, scored against evidence (appraisals, training records), not opinion.
• Attendance and disciplinary record — usable, but absence linked to disability, pregnancy or a protected characteristic must be excluded or handled with extreme care, since scoring it directly risks discrimination claims.
• Length of service — can be one factor among several, but using it as the sole or dominant criterion needs care given age-discrimination risk.
• Scoring every at-risk employee in the pool against the same criteria, by the same process, with the scoring recorded and available if challenged.

The evidential failure that sinks most tribunal defences isn't that the criteria were unreasonable — it's that the scoring wasn't actually recorded contemporaneously, so the employer can't produce anything beyond "we decided X was the right outcome" when asked to show the process.

Suitable alternative employment

Before confirming a redundancy, the employer must consider whether any suitable alternative role exists within the organisation (or an associated employer) and offer it if one does. An employee who unreasonably refuses a genuinely suitable alternative can lose their right to statutory redundancy pay — but "suitable" is judged objectively (pay, status, location, skills match), not just by whether the employer thinks it's a downgrade. Where the alternative role has materially different terms, the employee is entitled to a trial period (normally 4 weeks) to assess suitability without losing their redundancy rights during that trial.

Statutory redundancy pay

Employees with 2+ years' continuous service are entitled to statutory redundancy pay, calculated by age band for each full year of service, capped at 20 years' service and subject to a statutory weekly pay cap that rises each April:

• Half a week's pay for each full year under age 22.
• One week's pay for each full year aged 22–40.
• One and a half weeks' pay for each full year aged 41 and over.

Many employers pay more generously than the statutory minimum, either contractually or as a matter of policy — but the statutory figure is the floor, calculated against the current weekly pay cap, not actual salary if it exceeds that cap.

Building a process that holds up if challenged

The common thread across every element above is the same: a redundancy process is judged not just on whether the eventual outcome was reasonable, but on whether it can be evidenced as genuinely fair — consultation that happened before the decision was final, selection criteria applied consistently and recorded, alternative roles genuinely considered. Reconstructing that trail after an employee raises a grievance or a tribunal claim, from scattered emails and someone's memory of a conversation, is far harder than having kept a single running record from the start. Even a lightweight structured record — the kind HRIQ keeps for a small business's HR processes — turns "we're confident we did this properly" into something you can actually produce.

Common mistakes

1. Using redundancy to remove a specific person while the role itself continues.
2. Treating consultation as informing employees of a decision already made, rather than genuinely open discussion before it's final.
3. Missing the 20/100-employee collective consultation thresholds because they're counted per establishment within a rolling 90 days, not company-wide.
4. Selection criteria that aren't scored consistently, or aren't recorded at the time.
5. Not considering or offering a genuinely suitable alternative role before confirming redundancy.
6. Getting the statutory redundancy pay calculation wrong — using actual salary instead of the capped weekly figure, or miscounting full years of service.

This guide is general information, not legal, tax or compliance advice. Rules change — always check the current official guidance for your situation.