Redundancy Done Right: 7 Key Steps to Avoid Legal Pitfalls

Redundancy is not just a single decision- it is a structured process with serious legal implications. Mishandling any step can lead to costly claims and damage morale. Follow these seven key steps to protect your business and treat people fairly.

1. Confirm the Genuine Need

Redundancy must be based on a real business need, such as closure, relocation, or reduced demand for certain roles. Never use redundancy as a shortcut for performance issues. Always consider alternatives first (e.g., redeployment, reduced hours, voluntary redundancy) and document your reasoning.

2. Plan and Prepare

Identify which roles- not individuals – are at risk. Prepare clear information for staff, including the business case, selection criteria, and timelines. If 20 or more redundancies are proposed at one site within 90 days, collective consultation with employee representatives or unions is legally required, with minimum timeframes.

3. Meaningful Consultation

Consultation is essential and must be genuine. Discuss reasons, explore alternatives, and listen to feedback before making decisions. For collective redundancies, consultation must cover ways to avoid or reduce redundancies and lessen their impact. Failure to consult properly can result in significant financial penalties.

4. Fair Selection Criteria

If redundancies are unavoidable, apply fair and objective selection criteria-such as skills, qualifications, performance, disciplinary record, and attendance (excluding protected absences). Criteria must not discriminate under the Equality Act 2010. Use a scoring matrix and allow employees to challenge their scores.

5. Offer Suitable Alternatives

You must look for and offer suitable alternative roles within the organisation. If an employee unreasonably refuses a suitable alternative, they may lose their right to redundancy pay. A four-week statutory trial period applies to any alternative role.

6. Communicate and Support

Communicate openly and with empathy. Provide clear written outcomes, notice periods, redundancy pay details, and available support. Offer an appeal process to resolve disputes and demonstrate fairness.

7. Review and Rebuild

Afterwards, review the process and support remaining staff to rebuild morale and trust.

How Wollens Can Help

Wollens’ Employment Team can guide you through every stage of conducting a redundancy, including:

• Assessing and documenting the business case
• Designing fair selection criteria
• Managing consultation processes
• Drafting communications and documentation
• Advising on alternative roles and redundancy pay
• Supporting appeals and minimising legal risk

Whether you need strategic advice or hands-on support, Wollens offers clear and practical guidance to help you achieve a fair, defensible outcome, while protecting your reputation and supporting your people. If you need help, contact our Employment Team at Wollens today.

You can also complete an online enquiry form. One of the Wollens team will contact you as soon as they are available.