As we see the 12th rise of interest rate in a row by the Bank of England (its highest rate since 2008) and bills still increasing resilience and budgeting is ever more an issue for businesses. We are now seeing waves of redundancies, the most recent of which is Vodafone which announced in May 2023 that it would cut 11,000 jobs globally over three years due to underperformance. Redundancies present challenges to both employers and employees. Whilst this is not a happy topic, it is reality for some businesses so we hope to provide guidance on effectively dealing with redundancies, focusing on strategies for employers and employees to navigate this difficult and unpleasant process while ensuring compliance and fairness.


Redundancy generally means that an employee is dismissed because their role is no longer needed, but there must be a genuine business justification for the proposed redundancies. Common reasons include business reorganisation, economic challenges, technological advancements, or a decrease in demand for products or services.

The employer should be extremely cautious when implementing redundancy as their employees are entitled to statutory rights including fair selection and a fair process (see below). They should always give notice, offer a forum to talk through the process, give clear timelines, where possible offer alternative employment options maybe to some voluntary redundancy options. Opening up a transparent dialogue early can really help a smoother process.

 What should the employer do? 

Establish fair and objective selection criteria for determining which employees will be made redundant. Common criteria include skills, qualifications, performance, length of service, disciplinary records, and redundancy scoring matrices. Avoid any form of discrimination or bias in the selection process, ensuring that decisions are based on legitimate business reasons.

Explore alternative options to redundancy, such as offering voluntary redundancy, early retirement schemes, reduced working hours, job sharing, or retraining opportunities. Consider whether there are suitable alternative roles within the organisation that affected employees could be redeployed to, and provide support and training if necessary

Employees may accept new or renewed employment as alternatives to redundancy payments, however, this is subject to specific legal requirements. In addition, the employer may provide training opportunities to reskill their employees for different roles. If redundancy is inevitable, the employer can consider giving their employees reasonable time off and/or contribute towards their costs to help them find other employment. Such measures can help retain valuable employees and/or mitigate the impact of redundancy.

In certain cases, the employer is required to consult with trade union representatives or other elected employee representatives before redundancies are made, e.g., 20 employees or more are to be made redundant or there is a works council agreement or a collective agreement with a recognised trade union in place. Failure to conduct mandatory consultation may result in legal actions being taken against the employer, e.g., protective awards. Therefore, the employer should engage in timely and transparent communication with their employees to foster trust and minimise risks.

The employer must also adopt a fair and objective process when selecting employees for redundancy. It must create a fair selection process and pool of employees to consider. This criteria can include  length of service, self-selection, performance, skills, qualifications, and disciplinary records. However, the employer must make sure to avoid discriminatory practices and comply with employment laws and regulations, including those related to equality and diversity. So it cannot only create a pool of women or those over a certain age for example. Documenting the selection process and maintaining transparency can help prevent claims and disputes against the employer in relation to their redundancy process.

Similar to termination, the employer must also give minimum notice periods to their employees in case of redundancy (from one week’s notice if the employees were employed between one month and 2 years to 12 weeks’ notice if the employees were employed for 12 years or more). This is suspect though to your contractual terms.

As redundancy is a strictly regulated process that can be extremely c Conduct individual consultation meetings with affected employees to discuss their situation, the proposed redundancy, and any alternative options available.

Give employees an opportunity to provide input, ask questions, and raise any concerns they may have.

Provide written confirmation of the redundancy decision, including details of any redundancy packages, notice periods, and other entitlements

Complex depending on the size and composition of the employer’s workforce, the employer should consider seeking legal advice and support to ensure compliance and minimise risks of claims and disputes.

Can an employer avoid redundancies

Proactive Communication: Stay informed about the state of your company and any potential challenges or changes it may be facing.

Maintain open lines of communication with your managers. Regularly check in with them to discuss performance, projects, and any concerns you may have may anticipate problems before they develop.

Continuous Learning and Skill Development:

Keep your teams skills up to date and relevant to their role and industry.

Stay informed about emerging trends, technologies, and best practices in your field. Adapt to changing circumstances and be flexible.

Demonstrating Value to your customers: Consistently deliver high-quality work and meet or exceed performance expectations.

Take initiative in identifying and solving problems or inefficiencies in your processes.

Seek opportunities to contribute to the company’s success, such as considering improvements, cost-saving measures, or innovative ideas.

Redundancy payments

Calculating redundancy is not always as easy at it may sound either:

  1. Payment in lieu of notice is only permitted if the employment contract permits this, this element mut be subject to normal tax deductions
  2. The compensation element must meet statutory minimums, for those over 2 years with the employee’s age being a factor, length of service and any enhanced payments set out in the contract of handbook
  3. Money can be allocated to staff pensions if the payment is going above the national tax-free element
  4. All usual holiday leave , salary , bonuses and expenses must still be paid subject to tax deductions
  5. Any shares vesting must still be addressed fairly under the existing terms
  6. Legal costs are often paid as a contribution when agreeing a settlement agreement which gives both parties comfort legally

Employers can also make offers such as providing support and assistance to affected employees during the redundancy process, including access to counseling services, job search resources, outplacement support, or training opportunities.

What should the employees do? 

Employees facing redundancy should proactively seek information from their employer regarding the redundancy process, consultation periods, and available support services.

Employees are normally entitled to statutory redundancy pay if they have worked for their employer for 2 years or more. The pay is calculated based on the employee’s age and length of service (from 0.5 week’s pay for each full year you were under 22 years old to 1.5 weeks’ pay for each full year you were 41 years old or more). There are also maximum limits on the length of service (20 years) and amount of statutory redundancy pay (£19,290 if the employee was made redundant on or after 6 April 2023).

If a dismissal is unfair (e.g., employees are selected for redundancy on the basis of their sex, marital status, age, trade union membership, or whistleblowing, etc), they may bring unfair dismissal claims against their employer.

Employees should make sure they fully understand their rights and entitlements under employment law. They should also consider seeking professional advice and support from experienced employment solicitors to ensure their rights are protected throughout the process. Employers are obliged to pay for this advice if they are seeking a settlement agreement

Terms to consider when signing a settlement agreement

  • understanding any ongoing post-termination causes especially restrictions , like working for a competitor, as you may need to re-negotiate these
  • ongoing duties of confidentiality and not to say anything derogatory about your employer – you may want to make these mutual
  • there will be tax indemnities so understand what tax has been deducted and paid and which hasn’t, understand the position
  • what happens if they want to re-hire you at a later date any repayment terms included in there
  • have you received everything you deserve : holiday pay, bonus , expenses, any shares vested , salary and correct compensation
  • what property do you need to return, delete or can you keep
  • what can you tell people , who and how , is key for confidentiality but for you to seek alternative work so an agreed reference is always suggested
  • are they asked to go on garden leave , if so how does this look
  • will thy be required to help with any transitional hand overs

Employee’s Understanding Redundancy:

Familiarize yourself with the concept of redundancy and the reasons your employer has provided. Ask for clarification if you don’t understand why your role is being made redundant or if you have concerns about the selection process.

  • Consultation with Your Employer:

Engage in open and constructive communication during the consultation process. Express your concerns, ask for further information, and explore potential alternatives to redundancy.

  • Consider joining any employee representative groups or trade unions that can support you during the consultation process.
  • Redundancy Selection:

If your employer is implementing a selection process, inquire about the criteria they are using. These criteria may include skills, qualifications, performance, length of service, disciplinary records, or redundancy scoring matrices. Seek clarification on how the selection process will be conducted fairly and objectively. Ensure that there is no discrimination or bias involved.

  • Explore Alternatives:

Inquire about any alternative options your employer may offer to avoid redundancy. These could include voluntary redundancy, early retirement schemes, reduced working hours, job sharing, or retraining opportunities. Assess whether there are suitable alternative roles within the organization that you could be redeployed to. Discuss this possibility with your employer and express your interest.

  • Seek Support:

Take advantage of any support or assistance your employer offers during the redundancy process. This could include access to counselling services, job search resources, outplacement support, or training opportunities. Seek advice from external sources such as job search agencies, career coaches, or legal professionals to ensure you are well-informed about your rights and options.

  • Future Opportunities: Update your resume and start exploring potential job opportunities. Consider networking, attending job fairs, or utilizing online job portals.
  • Enhance your skills through training or professional development programs to increase your marketability.


Redundancy poses challenges for both employers and employees. As it can be an extremely difficult, unpleasant, and complex process, employers and employees should both consider engaging experienced employment solicitors to help them understand their rights and obligations and navigate the process to protect business and individual interests.

Related links


    • rovide written confirmation of the redundancy decision, including details of any redundancy packages, notice periods, and other entitlements.
  1. Redundancy Packages and Entitlements:
    • Determine the redundancy packages, severance pay, notice periods, and any other entitlements based on legal requirements, employment contracts, collective agreements, or company policies.
    • Ensure that all payments and calculations are made correctly and in accordance with applicable laws and agreements.
  1. Support for Employees:
    • Provide support and assistance to affected employees during the redundancy process, including access to counseling services, job search resources, outplacement support, or training opportunities.
  1. Compliance with Legal Requirements:
    • Familiarize yourself with the relevant employment laws, regulations, and procedures governing redundancies in your jurisdiction.
    • Ensure compliance with obligations regarding consultation, notice periods, severance payments, and any other legal requirements.

Remember, this is a general guide, and specific requirements may vary depending on your location and circumstances. It’s essential to seek legal advice or consult employment experts to ensure compliance with the law and to address any unique aspects of your situation.