3rd August 2026 ❘

Redundancy Rights: What Employers Need to Know

redundancy process for employers

Managing redundancies can be one of the most challenging issues for employers. Whether your business is restructuring, reducing costs or adapting to changing market conditions, it is important to ensure that any redundancy process is handled fairly, consistently and in line with current employment law.

A redundancy situation may arise where:

  • A business closes
  • A workplace closes and/or there is a change in location
  • There is a reduced need for employees to carry out a particular type of work

However, redundancy is not simply a reason to dismiss an employee. Employers must follow a fair procedure and comply with a range of legal obligations.

A Fair Redundancy Process

Employers should ensure that they:

  • Identify a genuine redundancy situation
  • Consult properly with affected employees
  • Use fair and objective selection criteria
  • Consider suitable alternative employment where possible
  • Follow the correct notice and dismissal procedures

Failing to follow a fair process can expose employers to claims for unfair dismissal, discrimination or breach of contract.

Consultation Obligations

Consultation remains one of the most important aspects of any redundancy exercise. Affected employees should be given  the opportunity to discuss:

  • The reasons for the proposed redundancies
  • How selection decisions will be made
  • Ideas on how to avoid or make fewer redundancies
  • Key skills and experience required in the business moving forward
  • Any alternatives being considered e.g. redeployment or voluntary redundancy
  • The proposed timescales
  • Any concerns the employees have
  • How the employer can support the employees at risk e.g. time off to update CV’s/undergo training etc.

Where 20 or more redundancies are proposed within a 90-day period, collective consultation obligations may apply. Employers should also be aware that the Employment Rights Act 2025 introduces changes to collective redundancy rules, including wider consultation trigger thresholds across businesses with multiple sites which will come into effect in 2027.

The financial risks of getting collective consultation wrong have also increased significantly. From April 2026, the maximum protective award for failing to comply with collective consultation obligations doubled from 90 days’ pay to 180 days’ pay per affected employee.

Redundancy Pay and Employee Rights

Employees with at least two years’ continuous service may currently be entitled to statutory redundancy pay, together with notice pay and payment for accrued but untaken holiday.

Employers should also be aware that under the Employment Rights Act 2025, the qualifying period for ordinary unfair dismissal claims is due to reduce from two years to six months from January 2027 – something all employers need to be aware of as it will affect anyone recruited from this July onwards. This means employees will gain unfair dismissal protection much earlier than under the current rules, increasing the importance of following a fair redundancy and consultation process from the outset.

Some employees may also benefit from enhanced contractual redundancy rights under employment contracts or workplace policies.

Avoiding Risk

Redundancy processes are frequently challenged where:

  • Consultation has been rushed or inadequate
  • Selection criteria are unclear or subjective or discriminatory
  • Alternative roles have not been properly explored
  • The redundancy is not genuine

With employment law continuing to evolve under the Employment Rights Act 2025, taking legal advice at an early stage is more important than ever. Early advice can help employers manage restructures confidently, reduce the risk of disputes and protect the wider business.

Speak to Burnetts

Our Employment team advises employers on all aspects of redundancy and restructuring, including consultation processes, settlement agreements, business reorganisations and defending Employment Tribunal claims.

If your business is considering redundancies and you would like practical, commercially focused advice from one of our Employment Solicitors please get in touch.

You might also find out Employment Rights Act Health Check useful – you can complete it here.