How Do I Make an Employee Redundant?

Making an employee redundant is not simply a matter of deciding that you no longer need them and giving them notice. There should be a true redundancy situation and the process of dismissal should be conducted in a fair manner. This can be an awkward situation for the employer. You might be restructuring as a result of losing business, cutting costs because you have less revenue, closing down part of the business, or altering how your organisation works. In any case, if the process is done incorrectly, it could result in an unfair dismissal claim, discrimination claims or other types of employment issues. KLG Law advises employers on redundancy situations across the UK. Our employment redundancy lawyers will advise you on the right way to terminate an employment relationship where redundancy is the appropriate solution; they’ll help you consider the right selection criteria to be considered and provide you with the correct guidance in the final stages of the termination process. What Is Redundancy? The term ‘redundancy’ has a legally defined meaning. A genuine redundancy situation may arise where an employer’s business closes, a workplace closes, or the employer’s need for employees to carry out work of a particular kind has ceased or diminished (or is expected to cease or diminish). Redundancy relates to the employer’s operational requirements rather than any issue concerning a particular employee. Redundancy is typically not the process of choice when an employee is dismissed due to misconduct or poor performance. Likewise, where a business continues to require the same work to be performed, simply replacing one employee with another is unlikely to amount to a genuine redundancy situation. A redundancy process should not be used to address concerns relating to an individual employee’s conduct, capability or performance where those concerns are the true reason for dismissal. What Should You Do Before Starting a Redundancy Process? Set some ground rules for the discussion with the employee by determining the reasons for the proposed redundancy. It is important to be able to articulate to the employer what has changed in the business and why current staffing arrangements are no longer necessary. It may be a decrease in workload, loss of contract, departmental closure, or financial constraints, or a larger business restructuring. Sensible also is the question of whether redundancy can be eliminated. This may involve capping overtime, hiring fewer replacement workers, implementing voluntary redundancy, adjusting working arrangements and/or redeploying staff into appropriate alternative roles. These considerations are not excluded because a company wishes to lower the cost of its payroll. Good preparation also helps you explain things much better you’ll be able to do during a consultation. Employers should also give genuine consideration to whether redundancies can be avoided. Exploring alternatives before and during consultation is an important part of a fair redundancy process. Do I Have to Consult the Employee? Yes. Before making the final decision on redundancy, the employee should be consulted. Consultation does not mean that you are telling the employee that they are already dismissed. The employee should be informed that their job is in jeopardy and provide sufficient information to them so that they can understand why. They must be given a chance to respond, ask questions and make suggestions.  There is no statutory minimum consultation period for an individual redundancy process. What is required is meaningful consultation before any final decision is made. Employees should have a genuine opportunity to understand the proposal, challenge it, ask questions and suggest alternatives. Employers should remain open-minded throughout the process and avoid treating dismissal as a foregone conclusion. If it’s a simple redundancy, it may not take too long. If the restructuring is more complex or larger in size, extensive consultations will likely be needed. The key is that the employer must remain open-minded while going through the process. How Should You Select an Employee for Redundancy? If only one role is genuinely disappearing, the selection process may be relatively straightforward. If several employees carry out similar work and you only need to reduce the number of employees, matters become more complicated. You may need to establish a selection pool and apply fair, objective criteria. Selection Factor What the Employer Should Consider Skills and qualifications Whether employees have skills that are relevant to the future needs of the business. Experience Relevant experience should be assessed consistently across the selection pool. Performance Performance criteria should be based on reliable and documented information. Disciplinary record Any disciplinary information should be accurate and applied consistently. Attendance Care is needed where absences relate to disability, pregnancy or other legally protected circumstances.   Employers should aim to use objective and measurable selection criteria wherever possible. Many employers use a scoring matrix supported by documentary evidence. Any criteria applied should be capable of being explained and justified if later challenged. What Happens During Redundancy Consultation? There may be several meetings depending on the circumstances. At the consultation, you need to communicate to the employee why you are proposing the redundancy, share the details and listen to them. If they offer an alternative, take it up, don’t reject it outright. Employers should genuinely consider any alternatives proposed and should not simply explain a decision that has already been made. The employee may ask questions on why the job was made redundant, why they were chosen, what other job they were taking, notice or redundancy pay. They may also give you information which you have not known before. Take minutes of meetings and make notes of key decisions. A well-documented procedure helps to establish the authenticity of the process and could come in very handy should the employee challenge the dismissal. Do You Need to Offer Alternative Employment? Employers should actively consider whether there are any suitable alternative vacancies available before confirming redundancy. Where a suitable alternative role exists, it should ordinarily be offered to the employee. Whether a role is suitable will depend on factors such as the duties involved, status, pay, benefits, location, working hours and the employee’s skills and experience.  Employees who accept suitable alternative employment are generally entitled to a statutory four-week trial period. The trial period may be extended in certain circumstances where additional training is required. Employees who are pregnant or who are on, or have recently returned from, maternity leave, adoption leave or shared parental leave may have enhanced rights in relation to suitable alternative vacancies and should be considered carefully during any redundancy exercise. What Happens When the Redundancy Decision Is Made? Only after consultation has been completed should you make the final decision. If redundancy is confirmed, the employee should receive the decision in writing. You will normally need to address their leaving date, notice period, redundancy pay, accrued holiday and any other contractual payments. Employers should also consider providing a right of appeal against the redundancy decision, particularly where a selection exercise has taken place. While not always legally required, an appeal can assist in demonstrating the overall fairness of the process. An eligible employee will generally qualify for statutory redundancy pay after at least two years’ continuous employment, subject to the relevant statutory rules.  The employee may also have a contractual entitlement to enhanced redundancy pay if their employment contract or company policy provides for it. What Notice Must You Give? Employees are entitled to at least the statutory minimum notice period, unless their contract provides for more. The statutory minimum depends on the employee’s length of service.  Statutory notice generally starts at one week once an employee has completed one month’s service and increases by one week for each completed year of service, up to a maximum of 12 weeks. Employees remain entitled to any longer contractual notice period contained in their contract of employment. The contract may provide for a longer notice period. You should check the employee’s contract before confirming the leaving arrangements. If the employee is being paid in lieu of notice, the contractual and legal implications should also be checked carefully. What About a Redundancy Agreement? Some employers seek advice from an employment solicitor to help negotiate an agreed exit rather than proceeding through a standard redundancy dismissal. This might involve a settlement agreement where the employer offers an employee an additional payment in return for the employee agreeing to waive specified employment claims. A settlement agreement can be useful where both sides want certainty and a clean break. However, it should not be used as a substitute for a genuine redundancy process where the employer is relying on redundancy as the reason for dismissal. The terms need to be drafted carefully, and the employee must receive independent legal advice for the settlement agreement to validly waive the relevant claims. What If You Are Making Multiple Employees Redundant? If you are proposing 20 or more redundancies at one establishment within a 90-day period, separate collective consultation obligations may apply under the Trade Union and Labour Relations (Consolidation) Act 1992. These obligations are in addition to individual consultation requirements. These requirements are different from the individual consultation process and can involve recognised trade unions or elected employee representatives. The timing is also important. From 6 April 2026, the maximum protective award for failing to comply with collective redundancy consultation requirements increased to 180 days’ pay per affected employee.  If you are considering a large-scale redundancy exercise, take legal advice before announcing the proposals. The financial consequences of getting collective consultation wrong can be substantial. Can You Make Someone Redundant Without a Solicitor? There is no general requirement to instruct a solicitor before making an employee redundant. However, redundancy law is an area where early legal advice can be worthwhile, particularly where there are complications. You should consider speaking to an employment lawyer with experience in redundancy and restructuring matters if: the employee has raised a grievance the employee has a disability or long-term health condition pregnancy or family leave is involved the employee has made a whistleblowing complaint several employees are affected you are unsure about the selection pool the employee is likely to challenge the decision you are considering a settlement agreement A solicitor can review the proposed process before it starts, which is generally much easier than defending an Employment Tribunal claim after the event. How KLG Law Can Help With Redundancy At KLG Law, we advise employers throughout the UK on redundancy and wider employment law matters. Our redundancy solicitors for employers give practical guidance, based on your business, not a one-size fits all approach. We are able to help you determine if there is any real redundancy situation, set up the selection process, arrange for consultations, explore alternatives and deal with the final termination. If a negotiated redundancy arrangement or a settlement agreement is more suitable, we can also advise on this. The aim is not simply to get an employee out of the business. It’s to assist you get the proper commercial result, with a minimum of risk of an avoidable lawsuit. Final Thoughts If you are wondering how do I make an employee redundant, you should not begin by writing the employee’s letter of termination. Begin with the why or business purpose. Determine if there is a true redundancy situation. Consider alternatives. Plan the consultation. When selecting, ensure it is equitable and impartial.  Redundancy may be a business requirement to keep a business alive or to restructure. It can be costly from a legal perspective as well if it is hurried or treated as a formality. Then ensure consultation has been completed, any suitable alternative employment has been considered, any selection criteria have been applied fairly and all notice, redundancy and contractual payments are dealt with correctly. When in doubt seek advice from a redundancy lawyer before you get started in order to have a smoother journey.