Employer Guide to Redundancy
Navigate the redundancy process fairly and legally whilst supporting your employees
Planning Redundancies
Making redundancies is never easy, but proper planning and following correct procedures protects both your business and employees. Key considerations include:
- 1Business Case: Document clear business reasons for redundancies
- 2Selection Criteria: Use fair, objective criteria that can be measured
- 3Alternatives: Consider redeployment, retraining, or voluntary redundancy
- 4Budget: Calculate redundancy costs including pay, notice, and holiday
Consultation Requirements
UK law requires employers to consult with employees before making redundancies. The type and length of consultation depends on how many employees are affected:
Individual Consultation
1-19 employees
Meet with each affected employee individually. No minimum timeframe, but must be meaningful consultation.
Collective Consultation
20+ employees
20-99 employees: Minimum 30 days
100+ employees: Minimum 45 days
Failure to Consult
Calculating Statutory Redundancy Pay
As an employer, you must pay statutory redundancy to eligible employees (2+ years service). The calculation is based on age, service length, and weekly pay:
- 0.5 week's pay for each full year under 22
- 1 week's pay for each full year aged 22-40
- 1.5 weeks' pay for each full year aged 41+
Statutory Caps (from 6 April 2025)
- Weekly pay capped at £719
- Maximum 20 years' service counts
- Maximum total payment: £21,570
Many employers offer enhanced redundancy packages that exceed statutory minimums as part of their employment policies.
Avoiding Discrimination
Use objective, measurable criteria such as skills, qualifications, performance records, and disciplinary records. Ensure the process is fair, transparent, and consistently applied to all employees in the affected pool.