Managing redundancy will never be simple or straightforward but this toolkit will assist managers to work through redundancies more effectively and avoid breaching employees’ rights and consequently appearing in the employment tribunal. When redundancies occur, the employer has a number of statutory duties towards employees, including the duty to consult them and to pay redundancy pay to those who are eligible.

Why you need to act correctly

Few organisations can avoid making redundancies at some stage. The managers who have to deal with these difficult situations have the added burden of working their way through a vast amount of employment legislation and case law.

Few organisations can avoid making redundancies at some stage. The managers who have to deal with these difficult situations have the added burden of working their way through a vast amount of employment legislation and case law.

Managing redundancy will never be simple or straightforward but this toolkit will assist managers to work through redundancies more effectively and avoid appearing in the employment tribunal.

The main, comprehensive source of all information on redundancy can be found within the topic, Termination of Employment and in the feature article, Top 10 tips for managing redundancy.

What you need to do as an employer considering redundancies.

  1. Consider the alternatives to redundancies — Alternatives to redundancy — suggestions

  2. External communication — arrange external communication with press, customers, suppliers, etc

  3. Internal notification — announce the situation at the earliest opportunity and if appropriate invite volunteers

  4. Notify the Department for Business, Energy & Industrial Strategy (BEIS) — if you are dismissing 20 or more employees 30 days’ notice is required, and for 100 or more employees 45 days’ notice.

  5. Determine severance terms and arrangements — tell trade unions and/or employee representatives how you will calculate redundancy pay that exceeds statutory requirements. Follow your Redundancy Policy.

  6. Select for redundancy — select people likely to be made redundant using objective criteria. Selection must not be influenced by any of the protected characteristics.

  7. Consult with individuals affected — consult individually with each person selected. Seek his or her views on possibly changing jobs or work arrangements and consider bumping if appropriate. There are lots of template letters in the Resources section for you to utilise.

  8. Issue redundancy notices — when consultation has ended, issue notice letters and be specific about the date that work will stop and when employment legally ends.

  9. Offer alternative employment if possible — once notices of redundancy dismissal have been issued, the employer is under a duty — until the effective termination dates — to seek to identify suitable alternative employment for the redundant employees.

  10. Action during redundancy notice period — employees who are under notice of redundancy, and who have been continuously employed for at least two years, have the legal right to take a reasonable amount of paid time off work to look for another job or to arrange training.

  11. Prepare severance documents — calculate statutory or enhanced redundancy pay, make a statement of all other payments, prepare P45, ensure everyone is told when outstanding wages, bonus, holiday pay, etc will be paid.

Problems calculating redundancy payments? You can find worked examples to assist you.

Useful feature articles

Conducting remote redundanciesRedundancies and recruitment — can employers balance both post-Covid?

Alternatives to redundancy — suggestions

Useful Q&As

Claiming wage costs through the Job Retention Scheme

The £1000 Job Retention Bonus

JRS and reimbursement

Useful news items

New Acas advice on redundancies

New law covers furloughed employees and redundancy payments

Tribunal case cited as a warning to employers

Last reviewed 20 October 2020