Redundancies & Restructures.

Individual consultation is required in every redundancy, regardless of the numbers involved, and is a key element of a fair process. It involves meeting with each affected employee, explaining the situation and why their role is at risk, sharing relevant information including their provisional selection scoring where applicable, and giving them a genuine opportunity to respond — to comment on the situation, challenge their selection, suggest alternatives to redundancy, and raise any other points. The consultation must be genuine and meaningful: it must take place while proposals are still at a formative stage, so that the employee's input can genuinely influence the outcome, rather than being a formality after the decision has effectively been made. The employer should consider and respond to the points the employee raises. Adequate individual consultation is essential — a failure to consult properly is one of the most common reasons redundancy dismissals are found unfair, even where the redundancy itself was genuine. The number and timing of meetings should reflect the circumstances. We advise employers on conducting individual consultation properly and on what information to share and when.

Designing the selection pool and criteria fairly is one of the most important and scrutinised parts of a redundancy process. The selection pool is the group of employees from which those to be made redundant will be selected — it should be defined sensibly by reference to the type of work that is diminishing, and the employer has some flexibility but must be able to justify the pool chosen. The selection criteria are the measures used to decide who within the pool is selected. They should be objective, measurable, and applied consistently and fairly — common criteria include skills, qualifications, experience, performance, and disciplinary record. Criteria must not be discriminatory: selecting on grounds related to a protected characteristic, or using criteria that disadvantage a protected group without justification, exposes the business to discrimination claims. Selection based on subjective opinion, or on criteria designed to target particular individuals, is a common cause of successful unfair dismissal claims. The pool and criteria should be designed and documented carefully before scoring takes place. We advise employers on defining a defensible pool and lawful, objective criteria.

A restructure and a redundancy are related but not the same. A redundancy is a specific legal concept — a dismissal because the requirement for employees to do particular work has ceased or diminished (or a workplace or business is closing). A restructure is a broader reorganisation of how a business is structured or how work is carried out, which may or may not involve redundancies. A restructure can involve: redundancies, where roles are removed; changes to employees' terms and conditions, such as duties, hours, or location, which require the employees' agreement or a careful and lawful variation process; the creation of new roles, into which existing employees may be slotted or for which they may have to apply; and, where part of the business is transferred, TUPE implications. The legal issues therefore span redundancy law, the law on varying contracts, and potentially TUPE — and a restructure frequently engages more than one of these at once. Handling a restructure lawfully requires identifying which legal regimes apply and managing each correctly. We advise employers on planning and implementing restructures, addressing the full range of legal issues involved.

A fair redundancy process rests on getting both the substance and the procedure right. In outline, a fair process involves: establishing that there is a genuine redundancy situation; identifying an appropriate pool of employees from which selection will be made; applying fair, objective selection criteria; consulting properly with the affected employees — individually, and collectively where the numbers require it; considering suitable alternative employment within the business; and confirming the redundancy and dealing with notice and payments only after the process is complete. Throughout, decisions and the reasons for them should be documented at the time. Fairness of process is critical: a dismissal can be found unfair even where there was a genuine redundancy, if the procedure was not fair — for example, if consultation was inadequate or selection was not objective. Following a proper process protects both the affected employees and the business. Because the requirements are detailed and the consequences of getting them wrong significant, employers should take advice before starting a redundancy process. We guide employers through each stage to ensure the process is fair and defensible.

Establishing a genuine redundancy situation is the foundation of a fair redundancy, because without one a redundancy dismissal cannot be fair. In law, a redundancy situation exists broadly where: the business is closing down entirely; a particular workplace is closing; or the need for employees to carry out work of a particular kind has ceased or diminished, or is expected to. The most common situation is the third — a reduced requirement for employees to do particular work, whether because of falling demand, reorganisation, or efficiency measures. For the employer, the key is to be able to demonstrate the genuine business reason behind the redundancy and to document it: the commercial rationale, the change in the requirement for work, and how that translates into the proposed reduction in roles. If challenged, the employer must be able to show that the redundancy was genuine and not, for example, a pretext for removing a particular individual. Being clear and able to evidence the genuine situation at the outset protects the process. We help employers establish and document the redundancy situation properly before the process begins.

TUPE — the Transfer of Undertakings (Protection of Employment) Regulations — protects employees when the business or undertaking they work in is transferred to a new employer, or when a service is outsourced, insourced, or moves between providers. Where TUPE applies, the affected employees automatically transfer to the new employer on their existing terms and conditions, with their continuity of employment preserved, and they are protected against dismissal connected with the transfer. TUPE has significant implications for restructures and business sales: the parties must inform and consult appropriate employee representatives about the transfer; the buyer inherits the transferring employees and their liabilities; changes to terms and conditions connected with the transfer are restricted; and dismissals connected with the transfer are automatically unfair unless they fall within a permitted economic, technical, or organisational reason. Getting TUPE wrong can result in claims and unexpected liabilities, and it frequently catches out businesses that did not realise TUPE applied. Identifying whether TUPE applies, and managing the information, consultation, and transfer correctly, is essential. We advise both transferring and receiving employers on TUPE obligations.

The length of a redundancy process depends primarily on the numbers involved and whether collective consultation is required. For a smaller redundancy involving individual consultation only, the process may take a few weeks, allowing time for proper consultation meetings and consideration of alternatives. Where collective consultation is required — 20 or more redundancies at one establishment within 90 days — the statutory minimum consultation periods apply: at least 30 days before the first dismissal for 20 to 99 redundancies, or at least 45 days for 100 or more, which sets a minimum timescale before any dismissal can take effect. In planning a redundancy or restructure, an employer should allow sufficient time to: establish and document the redundancy situation; design the pool and criteria; conduct genuine consultation that can influence the outcome; consider alternatives; and deal with notice and payments. Rushing the process — particularly cutting consultation short — is a common cause of unfairness. Planning the timetable properly at the outset, building in adequate time for each stage, is essential to a fair and defensible process. We help employers plan and project-manage redundancy and restructuring exercises.

Collective consultation obligations arise where an employer proposes to make 20 or more employees redundant at one establishment within a period of 90 days or less. In that situation, the employer must inform and consult appropriate employee representatives (a recognised trade union, or elected representatives) in good time, and at least: 30 days before the first dismissal where 20 to 99 redundancies are proposed; or 45 days before the first dismissal where 100 or more are proposed. The consultation must be genuine and undertaken with a view to reaching agreement on ways of avoiding or reducing the redundancies and mitigating their effects. The employer must also notify the Secretary of State. Getting collective consultation wrong is now more costly than ever: from 6 April 2026, the maximum protective award a tribunal can make for failure to consult collectively doubled from 90 to 180 days' gross pay per affected employee. This significantly increases the financial exposure of a flawed process. Further reform to the threshold is expected in 2027. Because the stakes are high, employers facing collective redundancies should take advice early. We guide employers through the collective consultation process.

Getting a redundancy process wrong exposes a business to significant risk. The principal risk is an unfair dismissal claim: a redundancy dismissal can be found unfair if there was no genuine redundancy situation, if the selection pool or criteria were unfair or subjective, if consultation (individual or collective) was inadequate, or if suitable alternative employment was not properly considered. Compensation for unfair dismissal includes a basic award and a compensatory award for financial loss. There is also a risk of discrimination claims, which carry uncapped compensation, if the selection or process disadvantaged employees because of a protected characteristic. Where collective consultation obligations applied and were not met, the tribunal can make a protective award — now up to 180 days' gross pay per affected employee following the increase on 6 April 2026 — which can be very substantial across a large group. Beyond the legal exposure, a poorly handled redundancy damages morale, reputation, and trust among remaining staff. Because the risks are significant and largely avoidable with a proper process, taking advice before and during a redundancy exercise is a sound investment. We help employers run processes that minimise these risks.

Settlement agreements are frequently used in redundancies and restructures to provide the employer with certainty and a clean break. In a redundancy, an employer may offer a settlement agreement — typically providing an enhanced payment above the statutory entitlement — in return for the employee waiving their right to bring claims, including any claim that the redundancy was unfair. This removes the risk of a subsequent tribunal claim, which can be valuable where there is any doubt about the robustness of the process or where the employer wants certainty and a managed exit. Settlement agreements can also be useful in restructures — for example, where an employee will not agree to a change in terms, or where a role is changing significantly and an agreed exit is preferable. To be binding, a settlement agreement must meet the statutory conditions, including that the employee has received independent legal advice. Whether to use a settlement agreement, and what to offer, is a commercial decision weighing the cost of the enhanced terms against the value of certainty. We advise employers on when settlement agreements are appropriate in redundancies and restructures and prepare them.

An employer carrying out redundancies has a duty to take reasonable steps to look for suitable alternative employment for employees at risk, as part of a fair process. This means considering whether there are other vacancies within the business — or, where relevant, within a group of companies — that the employee could fill, and bringing suitable vacancies to their attention rather than simply proceeding to dismissal. A failure to consider alternative employment can render a redundancy dismissal unfair. Where a suitable alternative role is offered and the employee unreasonably refuses it, they may lose their entitlement to a redundancy payment; but whether a role is suitable, and whether a refusal is reasonable, depends on factors such as the pay, status, location, and nature of the work compared to the employee's previous role. Employees also have the right to a trial period in a new role in certain circumstances. Particular protections apply to employees on maternity and other family leave, who may be entitled to priority for suitable alternative vacancies. We advise employers on discharging the duty to seek alternatives and on handling offers correctly.

An employer making an employee redundant must deal with several payments. Statutory redundancy pay is due to employees with at least two years' continuous service, calculated by reference to the employee's age, length of service (capped at 20 years), and a week's pay (subject to a statutory cap that is reviewed each April — for 2026/27 the cap is £751 a week, giving a maximum statutory redundancy payment of £22,530). The calculation gives half a week's pay for each year of service under age 22, one week for each year aged 22 to 40, and one and a half weeks for each year aged 41 and over. In addition, the employer must pay the employee's notice entitlement (or pay in lieu of notice), any accrued but untaken holiday, and any outstanding salary. Some employers offer enhanced contractual redundancy pay above the statutory minimum, where the contract or policy provides for it. Getting the payments right — and the tax treatment of them — matters. We advise employers on the payments due and ensure they are correctly calculated and treated.