Redundancy what you need to know before starting the process

The redundancy process can be very traumatic for absolutely everyone involved. In a small organisation, it can have a detrimental effect on each and every employee - not just those at risk of redundancy. Even when handled in the best possible way, it is an unsettling time provoking feelings of anxiety, insecurity and instability for the whole workforce, including the leadership.

Before getting started, I therefore urge every organisation to consider whether it is absolutely necessary. Is there anything at all you can do to avoid this? Your HR support will be able to help with this but some examples might include freezing recruitment, banning overtime, reducing costs and unnecessary spending in any way possible.

When there are no alternatives, or when these alternatives have been exhausted, spend time planning the process thoroughly. Don’t jump into this lightly, seek guidance and advice from an experienced HR professional and/or employment lawyer.

Redundancy Planning

  1. Review your documentation, know your redundancy policy and employment contracts inside and out and follow them. Where you don’t have a redundancy policy follow ACAS guidelines or the direction of your HR Support and/or employment lawyer.
  2. Document and evidence the business rationale (i.e. the current financial position, future projections etc). It’s advisable to share this and discuss this with affected employees.
  3. Look into the finances. Will the proposed redundancies achieve what you need to ensure a sustainable future?
  4. Map out each step within the process in a timeline inclusive of proposed dates for each element. This can obviously change but it is useful to have this at your fingertips to keep you on track and sane.
  5. Are any of the employees potentially affected off, or expected to be off, during this period? Plan for that to ensure that you effectively consult with all.
  6. Start planning and preparing all of the documents and templates that you will need for example the announcement, invitation to consultation letter, outcome of meeting letter, frequently asked questions and the list goes on.
  7. Plan the requirements in relation to the length of consultation, this will vary depending on how many employees are affected. Where 20 or more employees are affected, it is necessary to consult on a collective as well as an individual basis. The requirements are much more complex – with much costlier consequences – for these larger proposals, including a requirement to notify the Redundancy Payments Service (PRS) using the HR1 form at the start of consultation and ensuring you begin consultation before any firm decisions have been taken. An experienced HR professional and/or employment lawyer will be able to guide you through these additional complexities.

Redundancy Costs

What is this going to cost you? Map it all out.

  • Redundancy costs. Work out what this looks like for each affected employee. Remember those with less than 2 years’ service aren’t eligible for a statutory redundancy payment, although your organisation may offer enhanced payments.
  • Notice periods. Review the contractual notice entitlement and check that it is at least the same as the statutory notice entitlement for each employee potentially affected.
  • PILON or garden leave. Think about whether you would want the affected employees to work their notice if they were made redundant. The alternatives would be to pay the employee in lieu of notice (PILON) or garden leave in some circumstances but check whether there are appropriate clauses within their contracts.
  • Loss of productivity during the consultation period for all employees whether or not they are directly affected, including within the aftermath of the process for those remaining employees. It’s going to take a while for the organisation to fully recover from this.

Voluntary Redundancy

Do you wish to invite applications for voluntary redundancy. You don’t have to accept them, but you must make employees aware that their application will not necessarily be accepted. You may deem that loss of the particular employee’s skills and capabilities would be detrimental.

Selection Processes

Where it is necessary to pool employees together and reduce headcount within that pool, you will need a suitable selection process. This must be on an objective basis and the criteria should be shared with affected employees and employee representative for comments and contributions.

Suitable Alternatives

There is a requirement to offer any suitable alternative roles to employees who are at risk of redundancy. It’s therefore critical to be aware of the alternatives that exist and have the credentials to hand so that they can be fully considered. It’s also useful to offer affected employees a trial period in alternative roles.

The Process

The process and its length will very much depend on how many employees are potentially affected.

Redundancy Meeting

The Individual Process

Where under 20 employees are affected, consult on an individual basis. Although there is no statutory minimum period in relation to the length of consultation, a three-week period would be recommended as this allows sufficient time to undertake a meaningful process.

In such situations, the announcement would be the commencement of the redundancy consultation process.

The Collective Process

Where 20 employees or more are affected, consult collectively with recognized trade unions representatives or employee representatives prior to any individual consultation taking place, and at least 30 days (45 days if the proposal is for 100 or more redundancies) must pass between the start of consultation and the first redundancy.

If you don’t recognize unions or have employee representatives, you’ll need to undertake a ballot and election process prior to commencing the redundancy consultation process.

In such circumstances, the election of employee representatives would follow on from the announcement meeting and the first collective consultation meeting would be the commencement of the redundancy consultation process.


Do not forget the importance of clear and informative communication throughout the process both for those directly affected and for their colleagues. It’s useful to plan a separate meeting with these employees directly after the announcement to affected employees. Notify them of the proposals and the situation that their colleagues are facing so that they can be mindful of this and supportive. It’s also a great opportunity to reassure these employees that their roles are safe and no further redundancy or restructuring processes are envisaged.

This is a very brief blog about the things that you need to consider in relation to the redundancy process. This is a complex area of employment law and therefore requires specialist guidance, advice, and knowledge to keep your organisation on the right side of the law. I urge any organisation considering making redundancies of any nature to consult with their HR Team or an independent HR Consultant and/or obtain legal advice from a qualified employment lawyer.

As a fully qualified and experienced HR consultant at Staff Leave, I can provide your organisation with advice on many HR and people related matters, including supporting a redundancy process.

If you require any legal advice, I recommend Paul Coulson, Employment Lawyer and Director of PMC People Support LTD. Although Paul works independently to Staff Leave, we both take pride in offering an affordable, flexible and commercial approach to our clients.

Need HR Support? Learn more


Author: Anna Roberts

Anna Roberts

Anna is a HR Consultant at StaffLeave, heading up our HR Services division, and likes to contribute ways to help you get the most of your holiday management, improve well-being and work-life balance.