How to Manage a Redundancy Process Fairly
Redundancy is one of the highest-risk HR processes a business can go through. Get it wrong and you face employment tribunal claims, reputational damage, and a workforce that no longer trusts leadership. Get it right and you protect the business, treat people with dignity, and come out the other side intact.
Establish a Genuine Business Reason
Redundancy must be genuinely about the role, not the person. The business reason — whether it is a restructure, site closure, or reduced need for work of a particular kind — must be real and demonstrable. Using redundancy to exit a difficult employee is not redundancy. It is unfair dismissal with extra steps.
Define the Pool for Selection
Who is at risk? The pool should include all employees doing similar work or in similar roles. Getting the pool wrong — deliberately or otherwise — is one of the most common reasons redundancy processes are challenged. Document your rationale clearly.
Use Fair Selection Criteria
Once the pool is defined, apply objective, measurable criteria to select who is at risk. Skills, performance, attendance, and disciplinary record are commonly used. Avoid criteria that could be directly or indirectly discriminatory — last in, first out is generally not a safe approach.
Consult Meaningfully
Consultation is not a box-ticking exercise. Employees must have a genuine opportunity to comment on the proposals, suggest alternatives, and challenge their selection scores before any decision is made. If more than 20 employees are being made redundant within 90 days, collective consultation obligations apply and minimum timeframes must be observed.
Explore Alternatives
Before confirming redundancies, genuinely consider alternatives: redeployment into suitable vacant roles, reduced hours, voluntary redundancy, or a freeze on external recruitment. Failing to consider these weakens your process significantly.
Calculate and Pay Correctly
Statutory redundancy pay is calculated based on age, length of service, and weekly pay (subject to a statutory cap). Many contracts enhance this. Get the calculation right. Underpaying statutory redundancy pay is an automatic claim waiting to happen.
Handle the Conversation With Dignity
The meeting where you confirm redundancy is one of the hardest in HR. Be direct, be compassionate, and have the letter ready. Allow the employee to be accompanied. Give them time to process the news before moving on to next steps. How people are treated on the way out shapes how everyone else feels about staying.
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