Unfair Redundancy Costs Employer Over £30,000: What SMEs Can Learn (and How to Avoid the Same Mistakes)

Unfair Redundancy Costs Employer Over £30,000: What SMEs Can Learn (and How to Avoid the Same Mistakes)

A recent employment tribunal has awarded over £30,000 in compensation to a long-serving college staff member after finding that his redundancy was procedurally unfair. The ruling highlights several common pitfalls that UK employers should be alert to when handling restructures and redundancies—especially when managing multiple employees in parallel.

The Case: A Dismissal Without Full Transparency

Paul Richter, a staff member with 26 years of service at a college in North Yorkshire, was made redundant during a 2023 restructure. Despite his extensive experience supporting students with special educational needs and disabilities (SEND), Mr Richter was not successful in securing a new deputy head role within the reshaped structure—reportedly due to a lack of a formal teaching qualification.

He was instead offered a lower-paid alternative role, which he declined. What tipped the case in his favour at tribunal was that the employer failed to inform him of their existing pay protection policy—a provision that could have preserved his salary for a set period after redeployment.

The tribunal ruled this omission to be a breach of internal policy and determined that, had the policy been applied properly, Mr Richter would likely have accepted the new position. The college trust was ordered to pay £30,723, including lost pension contributions.

What Went Wrong (and How You Can Avoid It)

The key errors made in this case are surprisingly common during restructures:

• ❌ Failure to apply internal policies consistently, such as pay protection

• ❌ Insufficient transparency during the redeployment process

• ❌ Inadequate use of selection criteria or documentation during restructure

• ❌ Missing steps in efforts to avoid redundancy, including suitable alternatives

For employers, these missteps can lead to costly tribunal outcomes—even when redundancy payments have already been issued.

How Our Tools Help You Stay Compliant and Cost-Efficient

If you’re managing redundancies across multiple roles or locations, staying compliant and consistent is essential. Our Redundancy Calculator and Selection Matrix Tool help you:

✅ Calculate redundancy pay for multiple staff in parallel — saving time and reducing manual errors
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✅ Avoid missing key entitlements such as pay protection clauses or alternative role suitability

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Final Thought: Avoid the Tribunal Trap

This case is a clear reminder that process matters just as much as the decision itself. If you’re not applying your own policies—or can’t demonstrate a fair, transparent selection process—you could be facing more than just a redundancy payout.

By using our digital tools, small and mid-sized employers can reduce legal exposure, protect employee relations, and ensure redundancies are handled with confidence and compliance.