Redundancy & Restructuring

Under UK employment law, a redundancy arises where an employer’s need for employees to carry out work of a particular kind has ceased or diminished, or where a business closes or relocates.

For business owners and HR teams, this means redundancy may apply even if:

• The business is continuing to operate
• Work still exists, but fewer employees are needed
• Roles are being merged, reshaped, or removed as part of a restructure
• Work is being outsourced or moved to a different location

However, not every reorganisation automatically amounts to a genuine redundancy. If the role still exists in substantially the same form, or the reason for dismissal is performance or conduct‑related, the redundancy may be challenged.

We regularly advise employers across Bedfordshire and Hertfordshire, as well as businesses nationwide, on whether a proposed restructure qualifies as a genuine redundancy and how to structure changes lawfully from the outset.

A fair redundancy process is essential to reduce the risk of unfair dismissal claims. While the precise process will depend on the size and nature of the business, employers are generally expected to:

• Identify a genuine redundancy situation
• Define appropriate selection pools
• Apply fair and objective selection criteria
• Carry out meaningful consultation with affected employees
• Consider suitable alternative employment
• Follow a consistent and well‑documented decision‑making process

For HR professionals, “meaningful consultation” means more than simply informing employees of a decision. Employers must consult at a stage where redundancies can still be influenced and must genuinely consider alternatives.

Selecting employees for redundancy is one of the highest‑risk stages of the process. Employers must first identify a fair selection pool, which may include:

Employees doing the same or similar roles
Employees whose work is interchangeable

Once the pool is defined, employers should use objective, measurable selection criteria, such as:

• Skills and qualifications
• Performance records
• Disciplinary history
• Business‑critical competencies

Care must be taken to avoid criteria that could give rise to discrimination, particularly in relation to age, disability, pregnancy, maternity leave, or other protected characteristics.

We frequently advise HR teams and business owners in Bedfordshire and Hertfordshire on how to design defensible scoring matrices and apply them consistently, while also supporting employers with national workforces.

A fair redundancy process is essential to reduce the risk of unfair dismissal claims. While the precise process will depend on the size and nature of the business, employers are generally expected to:

• Identify a genuine redundancy situation
• Define appropriate selection pools
• Apply fair and objective selection criteria
• Carry out meaningful consultation with affected employees
• Consider suitable alternative employment
• Follow a consistent and well‑documented decision‑making process

For HR professionals, “meaningful consultation” means more than simply informing employees of a decision. Employers must consult at a stage where redundancies can still be influenced and must genuinely consider alternatives.

Selecting employees for redundancy is one of the highest‑risk stages of the process. Employers must first identify a fair selection pool, which may include:

Employees doing the same or similar roles
Employees whose work is interchangeable

Once the pool is defined, employers should use objective, measurable selection criteria, such as:

• Skills and qualifications
• Performance records
• Disciplinary history
• Business‑critical competencies

Care must be taken to avoid criteria that could give rise to discrimination, particularly in relation to age, disability, pregnancy, maternity leave, or other protected characteristics.

We frequently advise HR teams and business owners in Bedfordshire and Hertfordshire on how to design defensible scoring matrices and apply them consistently, while also supporting employers with national workforces.

A fair redundancy process is essential to reduce the risk of unfair dismissal claims. While the precise process will depend on the size and nature of the business, employers are generally expected to:

• Identify a genuine redundancy situation
• Define appropriate selection pools
• Apply fair and objective selection criteria
• Carry out meaningful consultation with affected employees
• Consider suitable alternative employment
• Follow a consistent and well‑documented decision‑making process

For HR professionals, “meaningful consultation” means more than simply informing employees of a decision. Employers must consult at a stage where redundancies can still be influenced and must genuinely consider alternatives.

It is recommended to seek advice early to ensure the process is proportionate, legally compliant, and aligned with commercial timelines.

Employers may be required to make several different payments on redundancy, including:

• Statutory redundancy pay (for employees with at least two years’ service)
• Notice pay or pay in lieu of notice (PILON)
• Accrued but untaken holiday pay
• Contractual entitlements such as bonuses or commission (depending on terms)

Many employers also choose to offer enhanced redundancy packages, often linked to settlement agreements, to manage risk and provide certainty.

For business owners and HR professionals, understanding the true cost of redundancy – including tax treatment and the interaction with settlement agreements – is crucial for budgeting and workforce planning.

Out team support clients on structuring redundancy payments in a way that is fair, compliant, and commercially sensible.