Employer redundancy obligations in the UK run from proving the role is genuinely disappearing through to paying the statutory sum, and every stage carries specific duties under the Employment Rights Act 1996 and related legislation. Skip a step and a legitimate business decision becomes an unfair dismissal claim. The financial exposure grew sharply on 6 April 2026, when the maximum protective award for botched collective consultation doubled to 180 days’ pay per employee.1Acas. How Your Employer Must Consult – Your Rights During Redundancy
Prove the Redundancy Is Genuine
A dismissal is only a redundancy in law when the reason is that the role itself is going, not the person doing it. The Employment Rights Act recognises two situations: the business or workplace closes, or the need for employees doing a particular kind of work shrinks or ends.2Legislation.gov.uk. Employment Rights Act 1996, Section 139 The statute uses the word “diminished,” which reaches temporary reductions as well as permanent closures.
You need documents to back the business case: financial reports showing declining revenue, board minutes approving the restructure, or a plan showing which functions are being merged. Without that paper trail, a tribunal is likely to treat the dismissal as an ordinary sacking dressed up as a redundancy.
Select Fairly
Once the at-risk roles are identified, define the selection pool. It should include everyone doing the same or interchangeable work. Drawing the pool too narrowly, for example limiting it to one team when two teams do overlapping work, invites challenge.
Selection criteria must be objective and measurable. A scored matrix covering attendance, performance, disciplinary history, and relevant qualifications is far safer than “last in, first out,” which can disproportionately affect younger workers or those who took career breaks and expose you to an indirect discrimination claim.3Equality and Human Rights Commission. Avoiding Unlawful Discrimination When Making Redundancy Decisions Length of service can sit in the matrix as one factor. It should not be the only one.
Selection must not turn on any protected characteristic under the Equality Act 2010: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, or sexual orientation.4Acas. How You’re Selected – Your Rights During Redundancy For disabled employees, you may also need to adjust the criteria or the process as a reasonable adjustment.
Consult Properly
Consultation is where employers most often either build a defensible process or hand a claimant their case.
Individual Consultation
Every affected employee is entitled to individual meetings, whatever the headcount. Explain why the redundancy is happening, how the employee was selected, and what alternatives exist. Give a real chance to challenge the scoring, suggest savings, or propose ways to avoid the dismissal. Record each meeting and your response to any suggestions. Tribunals look hard at whether consultation was meaningful or just a formality.
Collective Consultation
When you propose making 20 or more employees redundant at a single establishment within a 90-day window, collective consultation applies.5Legislation.gov.uk. Trade Union and Labour Relations (Consolidation) Act 1992, Section 188 You must consult recognised trade union representatives or, if no union is recognised, elected employee representatives. If none exist, arrange an election. The consultation must genuinely cover ways to avoid dismissals, reduce numbers, and soften the impact.
Minimum timescales apply before the first dismissal can take effect:
- 20 to 99 proposed redundancies: consultation must begin at least 30 days before the first dismissal.
- 100 or more proposed redundancies: consultation must begin at least 45 days before the first dismissal.6GOV.UK. Advance Notification of Redundancies – Guidance for Employers
Notifying the Government
On top of consulting the workforce, you must notify the Secretary of State using form HR1 when proposing 20 or more redundancies at one establishment. The same 30-day and 45-day minimums apply, and the clock starts when the Redundancy Payments Service receives your completed form, not when you send it. A copy also goes to the employee or union representatives. Failing to notify without good cause can lead to prosecution and a fine for the company or its officers.
The Cost of Getting Consultation Wrong
If you skip or shortchange collective consultation, a tribunal can make a protective award. From 6 April 2026 the maximum is 180 days’ pay per affected employee, doubled from the previous 90-day cap. Across a large-scale exercise, that adds up fast, and it is the single most expensive procedural mistake available to an employer.
Look for Suitable Alternative Work
Before confirming any dismissal, you must look for vacant roles within your organisation or any associated company that could suit the affected employee. A role is suitable if pay, status, hours, and location are reasonably close to the current job.7GOV.UK. Redundancy – Your Rights – Suitable Alternative Employment Offer the role in writing with enough detail for the employee to decide.
If the employee accepts a role that differs from their old one, a statutory four-week trial period applies.8Legislation.gov.uk. Employment Rights Act 1996, Section 141 Either side can walk away during those four weeks. If the employee decides the role genuinely isn’t suitable and leaves within the trial, they keep their right to a redundancy payment. The trial can be extended if training is needed, but any extension must be agreed in writing before the trial starts.9Acas. Suitable Alternative Employment
Employees on maternity, adoption, or shared parental leave, and pregnant employees, have priority. Where a suitable vacancy exists, they must be offered it before anyone else, even if other redundant employees are equally qualified.10Acas. Redundancy Protection for Pregnancy and New Parents Overlooking this is a common and costly mistake.
If suitable vacancies exist and you fail to offer them, the dismissal will likely be ruled unfair. Keep evidence that you actively searched, not just a claim that nothing was available.
Give Proper Notice
After consultation is complete and no alternative fits, you issue formal notice. Statutory minimums depend on length of service:
- One month to two years of service: at least one week’s notice.
- Two to twelve years of service: one week for each complete year worked.
- Twelve or more years of service: twelve weeks’ notice, the statutory maximum.11GOV.UK. Redundancy – Your Rights – Notice Periods
If the contract sets a longer notice period, the contractual term applies. You can pay in lieu to let someone leave immediately, but the money is still owed.
Pay Statutory Redundancy
Any employee with at least two years of continuous service who is dismissed by reason of redundancy has a statutory right to a redundancy payment.12Legislation.gov.uk. Employment Rights Act 1996, Section 135 The formula uses age, length of service, and weekly pay:
- Each full year worked while under 22: half a week’s pay.
- Each full year worked from age 22 to 40: one week’s pay.
- Each full year worked from age 41 onward: one and a half weeks’ pay.13GOV.UK. Redundancy – Your Rights – Redundancy Pay
Two caps limit the total. Service counts for a maximum of 20 years, and weekly pay is capped at £751 for redundancies on or after 6 April 2026, putting the statutory ceiling at £22,530.14Acas. Redundancy Pay Weekly pay is the average over the 12 weeks before the notice date, excluding overtime and bonuses unless the contract guarantees them. Give the employee a written breakdown showing how you got to the figure.
Statutory redundancy pay and any additional severance are combined for tax, and the first £30,000 of the combined total is free from income tax.15GOV.UK. Tax on Termination Payments – What You Pay Tax and National Insurance On Anything above that is taxed through PAYE. Notice pay, whether worked or paid in lieu, sits outside the £30,000 exemption and is taxed and subject to National Insurance as normal earnings.
Time Off and the Right to Appeal
Employees with two or more years of service who have been given notice of redundancy have a statutory right to reasonable time off during working hours to look for work or arrange training.16Legislation.gov.uk. Employment Rights Act 1996, Section 52 The law doesn’t fix the hours, so the test is what is reasonable in context. Refusing without good reason gives grounds for a tribunal complaint.
No statute compels a formal appeal stage, but tribunals expect one in a fair process. An employee who believes they were unfairly selected can write to their employer setting out why.17GOV.UK. Redundancy – Your Rights – Being Selected for Redundancy Skipping the appeal is the kind of shortcut that tips a borderline case into unfair dismissal. The appeal should be heard by someone not involved in the original selection, and the employee should be allowed to bring a colleague or union representative. If the appeal reveals a scoring error or an overlooked vacancy, reverse the decision rather than press on.