How to Make an Employee Redundant (in the UK) 2025
This guide summarises the main principles and key steps of the redundancy procedure in the UK according to 2025 employment law. It will help you decide if redundancy is the right option. For a complete understanding, consult the full ACAS procedure or contact me or a CIPD-qualified HR professional to assist in implementing redundancies within your business.
ACAS provides a comprehensive guide on redundancy, and a link to their resources can be found at the end of this document.
What is a Redundancy Situation?
In simple terms, redundancy occurs when there is insufficient work for one or more employees, resulting in a surplus of staff. This can lead to the termination of employment. ACAS outlines five specific redundancy situations, but this is the essence of the concept.
Establish a Redundancy Procedure
ACAS recommends following a formal redundancy procedure. A structured and empathetic approach ensures compliance and fairness. Ideally, your business should already have a redundancy policy, typically outlined in your employee handbook. If not, it is advisable to create one. You can purchase a detailed redundancy procedure template at the end of this document.
The Redundancy Procedure
The following steps are essential to carry out a redundancy process in the UK:
1. Try to Avoid Redundancies
While not always possible, consider alternatives to compulsory redundancy, such as:
- Reducing costs elsewhere in the business
- Making less use of freelancers
- Introducing a recruitment freeze
- Job sharing
- Limiting overtime
- Offering voluntary redundancy
2. Declare a ‘Redundancy Situation’ and Identify ‘At-Risk’ Employees
If redundancies cannot be avoided, declare a potential redundancy situation and identify employees ‘at risk.’ Efforts should be made to minimise the number of staff affected.
For redundancies involving 20 or more employees, additional obligations include:
- Informing the Secretary of State via the Department for Business and Trade (DBT).
- Consulting representatives of a recognised independent trade union or elected employee representatives.
3. Consult ‘At-Risk’ Employees
Employers must consult all ‘at-risk’ employees. Consultation involves:
- Explaining the redundancy process, selection criteria, severance entitlements, and calculations.
- Informing employees of their rights to be consulted and to make representations.
For redundancies involving 20 or more employees, collective consultation with trade unions or employee representatives is also required.
4. Selection Criteria for ‘At-Risk’ Employees
If selecting individuals from a pool of ‘at-risk’ staff, adopt fair and objective selection criteria. These may include:
- Disciplinary record
- Qualifications
- Job performance and quality of work
- Appraisal data
- Timekeeping and absence record
To streamline this process, consider using our Automated Redundancy Selection and Scoring Matrix (UK) – Excel-based and easy to use.
5. Severance Pay
Employees with at least two years’ continuous service qualify for statutory redundancy pay if selected. The payment amount is based on weekly pay, age, and length of service.
Employees dismissed due to redundancy are also entitled to the notice period specified in their contract, or statutory notice if greater.
For accurate calculations, always refer to the government or ACAS websites to ensure compliance with the latest statutory redundancy payment and notice pay guidelines.
Need assistance? Use our Excel-Based, UK Statutory Redundancy Pay Calculator – fully automated and compliant with current UK law.
6. Appeals Procedure
ACAS recommends an appeals procedure to address complaints from employees who feel the selection criteria were applied unfairly. This ensures transparency and gives employees an opportunity to voice concerns.
Future Changes to Redundancy Law
Aggregation of Redundancy Numbers Across All Sites
Proposals from the Labour Government suggest that redundancy numbers across all company sites will be aggregated. This means the threshold for collective consultation may be triggered more frequently, even if redundancies are spread across different locations. Employers will need to carefully consider how redundancy plans are structured to remain compliant with these potential changes.
Strengthening Redundancy Rights and Protections
The Labour Government has also pledged to end practices like ‘fire and rehire’ while introducing stricter codes of practice and clearer statutory guidelines. These changes aim to enhance redundancy rights and protect employees from being pressured into accepting disadvantageous terms. Employers should stay informed and prepare for these reforms to ensure their processes align with evolving legal requirements.
Conclusion
This guide is intended as a practical overview of the redundancy process and is provided with the expectation that you will seek advice from an employee relations specialist to ensure compliance with UK employment law.
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