The SME redundancy toolkit: practical support for tough decisions

We will always keep your personal information safe. We ask for your information in exchange for a valuable resource in order to (a) send information that we think may be of interest to you by email or other means and (b) send you marketing communications that we think may be of value to you.

Absolutely. Knowledge is power and sharing is caring. So here's some free know-how we hope you’ll find useful. Keep us in mind next time you have questions about managing your employees.

Redundancy is a type of dismissal due to a reduced need for workers. This usually happens when a business closes, moves, changes job roles, or has financial problems. 

In the UK, employers must follow a clear process when making redundancies, which includes informing employees, holding consultations, offering alternative roles if available, and providing redundancy pay if eligible. The process is designed to ensure fairness and transparency. 

By law, employees are entitled to the following notice periods:  

• If employed between 1 month – 2 years, at least one week’s notice  

• If employed between 2 and 12 years, one week’s notice for each year

• If employed for 12 years or more, 12 weeks’ notice 

A redundancy consultation is a formal process and legal requirement where employers must consult with employees who are at risk of redundancy. For smaller businesses, this could be an individual consultation. For larger businesses, a collective consultation may be required, especially if more than 20 employees are being made redundant. 

In the UK, minimum redundancy pay depends on age and length of service. Employees with at least two years of continuous service are entitled to statutory redundancy pay, which is calculated based on age, length of service, and weekly salary (up to a maximum limit). The amount can be found on the official government website or calculated using an online redundancy pay calculator. 

Yes, an employee can be made redundant during their probation period, but the same legal process must be followed. 

Yes, employees can appeal a redundancy decision if they believe the process wasn’t followed correctly or that they were unfairly selected. The appeal should be made in writing, and the employer must respond and consider the reasons for the appeal. 

The selection process involves choosing which employees will be made redundant. Employers should use fair and transparent criteria, such as performance, skills, qualifications, and attendance, to ensure no discrimination occurs. Employees should be consulted about the selection process. 

Yes, if an employee is made redundant and their position is later re-established or similar roles become available, they may be offered re-employment.

In addition to redundancy pay, employers are encouraged to provide outplacement support, such as helping employees find new jobs, offering career advice, or providing training. This support can help soften the impact of redundancy and assist employees in moving forward with their careers. 

If the redundancy process is not followed correctly, employees may have grounds to file a claim for unfair dismissal. It’s essential for employers to comply with redundancy laws and ensure the process is transparent, fair, and in line with UK employment law. 

While redundancy may be a necessary option for reducing costs, it is not the only solution. Employers should first explore other alternatives, such as reducing working hours, offering voluntary redundancy, or using furlough schemes (where available). Redundancy should only be considered when other options have been exhausted. 

Disclaimer: For the latest legal guidance on redundancies, check out the full explainer from Acas. If you’re considering a redundancy, we always recommend speaking to an employment law specialist first and foremost. To do so, please contact an HR expert or reach out to our Partner team, who can put you in touch with an HR consultant.