Redundancy is a challenging process that significantly impacts both employers and employees. Whether due to organisational restructuring, economic pressures, or changes in business direction, the decision to make staff redundant carries serious legal and ethical responsibilities. For employees, it can bring uncertainty, stress, and concerns about their future; for employers, it involves navigating sensitive conversations and adhering to complex legal requirements.
A fair, transparent, and legally compliant redundancy consultation process is not only a legal requirement under UK employment law but also a crucial step in maintaining trust, morale, and reputational integrity. Employers must follow a structured procedure to avoid claims of unfair dismissal and ensure all decisions are justified, evidenced, and defensible. Moreover, engaging with employees in a meaningful way during the consultation period can help preserve morale and demonstrate respect and consideration during a difficult time.
Kingfisher Professional Services understands the complexities involved in managing redundancies. With specialist expertise in Employment Law and HR, we offer practical, compliant, and compassionate guidance to support businesses through every stage of the redundancy process. Whether it’s developing fair selection criteria, managing consultation timelines, or ensuring legal compliance, our tailored support equips organisations to handle redundancies with confidence and care.
Understanding Redundancy Consultation
Legal Framework and Employer Obligations
Under the Employment Rights Act 1996, employers are legally required to engage in meaningful consultation with employees at risk of redundancy. This applies before any final decisions are made, ensuring that affected staff are given an opportunity to respond, suggest alternatives, and fully understand the implications of the proposed changes. The purpose is not merely to inform employees, but to enter into a genuine dialogue that considers their feedback.
If an employer proposes to make 20 or more employees redundant at one establishment within 90 days, this triggers a collective consultation requirement under the Trade Union and Labour Relations (Consolidation) Act 1992. Employers must also notify the Redundancy Payments Service (RPS) using form HR1 within the required timeframe. Failure to comply can result in protective awards of up to 90 days’ pay per affected employee and potential tribunal claims.
Employers must provide adequate information about the reasons for the proposed redundancies, the number of employees affected, the selection criteria, the consultation process, and the projected timescale. In collective consultations, this information must be provided in writing to employee representatives. Consulting meaningfully and in good faith helps reduce legal risk, fosters transparency, and promotes a smoother, more collaborative transition for all involved.
Individual vs. Collective Consultation
Redundancy consultations fall into two categories: individual and collective. An individual consultation is required in all redundancy situations, regardless of the number of employees involved. This allows each affected employee the opportunity to understand the reasons for the proposed redundancy and to offer feedback or alternative suggestions.
A collective consultation is mandatory when an employer proposes 20 or more redundancies within a 90-day period. In such cases, consultation must begin at least 30 days before the first dismissal for 20–99 redundancies, and at least 45 days prior for 100 or more redundancies. Employers are also required to consult with elected employee representatives or recognised trade unions.
Both forms of consultation are essential in ensuring fairness and legal compliance. Failure to engage properly can lead to claims for unfair dismissal and reputational damage.
Steps in the Redundancy Consultation Process
Understanding the sequence and structure of a redundancy consultation is essential for ensuring compliance and fairness. The following steps outline how to conduct a thorough, transparent, and legally sound process from start to finish.
Preparing for Consultation
Effective redundancy consultations begin with thorough preparation. Employers must first develop a clear and well-documented business case outlining the rationale for the proposed redundancies. This could include financial pressures, technological changes, or organisational restructuring.
At this stage, it’s vital to explore all possible alternatives to redundancy, such as redeployment, reduced hours, job sharing, or voluntary redundancy schemes. A transparent and considered approach not only meets legal standards but also builds credibility with staff and employee representatives.
Conducting the Consultation Meetings
Consultation meetings are an opportunity for open dialogue between the employer and the affected employee. Employers should communicate with empathy, clarity, and transparency, ensuring that employees feel heard and respected throughout the process.
During the meetings, employers should be prepared to discuss the reasons for the proposed redundancy, explore potential alternatives, and address any concerns raised by the employee. These discussions should be documented carefully and revisited as necessary to reflect any developments.
Providing Necessary Information
Employers are legally required to provide key information during the redundancy consultation process. This includes:
- The reasons for the proposed redundancies
- The number and categories of employees affected
- The proposed method of selecting employees for redundancy
- The timescale and process for implementation
- Details of any proposed redundancy payments
In collective consultations, this information must be provided to employee representatives in writing. Transparency is crucial to ensuring trust and enabling informed feedback.
Selection Criteria and Fairness
Establishing Fair Selection Criteria
Selection criteria must be objective, transparent, and consistently applied. Acceptable criteria include:
- Performance and productivity records: Objective assessments such as KPIs, performance reviews, and output levels over a relevant time period. Employers should use documented evidence to demonstrate how performance has been measured and evaluated.
- Relevant qualifications and skills: Specific qualifications, certifications, or skills essential to current and future business needs. This can include technical skills, language proficiency, or professional accreditations.
- Adaptability or ability to work across different roles: Flexibility to take on alternative roles or additional responsibilities can be a valuable asset. Evidence could include past cross-functional experience, willingness to undertake training, or demonstrated versatility within the company.
Employers must ensure that these criteria are relevant to the needs of the business and are not influenced by personal bias. Each employee should be scored consistently based on verifiable data.
Avoiding Discrimination
Employers must take care to ensure that selection criteria do not inadvertently disadvantage employees with protected characteristics under the Equality Act 2010. This includes characteristics such as age, disability, gender, race, religion, and maternity status.
To avoid claims of discrimination, employers should carry out an equality impact assessment and regularly review their criteria for potential bias. Involving HR professionals in the scoring process and maintaining full documentation will help support fairness and accountability.
Employee Rights and Employer Responsibilities
Employee Entitlements During Redundancy
Employees selected for redundancy have specific legal rights, including:
- A statutory notice period, or pay in lieu of notice: Employees are entitled to a minimum notice period based on their length of service, or to receive pay in lieu if the employer opts not to require them to work during the notice period. The length of notice must comply with legal minimums and any enhanced terms specified in the employee’s contract.
- Statutory redundancy pay (if employed for two or more years): Employees with at least two years of continuous service are entitled to a statutory redundancy payment. This is calculated based on age, length of service, and weekly pay (subject to the statutory cap), with older and longer-serving employees generally receiving higher payouts.
- Time off to look for new work or attend interviews: Employees under notice of redundancy are entitled to reasonable paid time off during working hours to attend job interviews or training sessions that support future employment. This entitlement is especially important in helping individuals transition out of redundancy.
- Consideration for alternative roles within the organisation: Employers must actively seek to identify and offer suitable alternative employment within the business or any associated company. If an appropriate role is refused without good reason, it may affect the employee’s entitlement to redundancy pay. Engaging in genuine efforts to redeploy staff can help retain talent and avoid unnecessary dismissals.
Some employment contracts may offer enhanced redundancy packages. It’s important for employers to be aware of both statutory entitlements and any contractual obligations to ensure full compliance.
Employer Compliance and Best Practices
Employers must follow fair procedures throughout the redundancy process to avoid the risk of unfair dismissal claims. Best practices include:
- Keeping detailed records of consultation meetings and decision-making processes: Accurate and thorough documentation can serve as vital evidence if a redundancy decision is challenged and ensures accountability at every stage.
- Providing employees with opportunities to give feedback: Allowing employees to voice their concerns and suggestions helps foster a sense of involvement and can lead to constructive alternatives being identified.
- Clearly documenting the rationale for redundancy decisions: A well-documented decision-making trail supports transparency and enables the organisation to clearly demonstrate the fairness and necessity of each redundancy.
- Offering support services such as outplacement or counselling where appropriate: These services help ease the transition for affected employees, providing emotional support and practical tools for securing future employment.
Maintaining open communication, consistency, and compassion can help preserve morale and reduce the risk of legal challenges.
How Kingfisher Professional Services Can Help
Kingfisher Professional Services offers comprehensive support for redundancy consultations and workplace restructuring. Our services include:
- Expert Consultancy: Tailored advice to ensure full compliance with UK employment law. Our experienced team helps employers navigate complex redundancy procedures with confidence and clarity.
- 24/7 Support: Immediate access to professional guidance on urgent redundancy matters, helping to reduce legal risk and respond to employee concerns in real-time.
- Bespoke Training: Custom training for HR teams and managers on conducting fair redundancy processes, from legal obligations to communication strategies.
With Kingfisher’s expert support, businesses can manage redundancies effectively, protect their reputation, and uphold the rights and dignity of their employees.
Conclusion
Redundancy is never an easy process, but following a fair, transparent, and legally compliant consultation process is essential for safeguarding both your organisation and its people. Understanding the legal framework, preparing thoroughly, and engaging in meaningful dialogue are key steps in reducing legal risk and maintaining trust.
Employers who handle redundancies with empathy, consistency, and professionalism not only reduce the likelihood of tribunal claims but also preserve their employer brand and workforce morale.
For expert support in navigating redundancy consultations, contact Kingfisher Professional Services. Our trusted advisors are here to help you manage change with confidence and care.