How to make someone redundant

Redundancy only arises in three situations: the business is closing entirely; the workplace where the employee works is closing; or the requirement for employees to do work of a particular kind has diminished or ceased. If none of these apply, dismissal for redundancy will not be genuine and will be unfair. Document clearly which category applies and why.

If you propose to make 20 or more employees redundant at one establishment within 90 days, you must notify the Redundancy Payments Service (RPS) using form HR1 before giving notice to employees. The minimum consultation period is 30 days for 20–99 redundancies and 45 days for 100 or more. Failure to notify is a criminal offence.

Identify the pool of employees who are at risk of redundancy. The pool should include all employees who carry out the type of work that is diminishing — not just the employee you have already decided to make redundant. Artificially narrowing the pool to target a particular employee is a common reason redundancies are found to be unfair.

Use objective, measurable selection criteria to decide who in the pool is selected for redundancy. Common criteria include: skills and qualifications; performance; attendance record; and length of service (LIFO — last in, first out — can be used but should not be the only criterion). Avoid criteria that could discriminate on the basis of a protected characteristic, such as part-time working status.

Before making any employee redundant, you must carry out individual consultation — this applies even for single redundancies. Write to each at-risk employee telling them they are at risk of redundancy, explaining the selection criteria, and inviting them to a consultation meeting. The consultation must be genuine — you must not have already made up your mind.

Hold at least one formal consultation meeting with each at-risk employee. At the meeting: explain why redundancies are necessary; explain how they have been selected (show them their scores if you have used a scoring matrix); explain what alternatives to redundancy have been considered; ask them if they have any ideas for avoiding redundancy; and discuss suitable alternative vacancies.

Before confirming redundancy, you must consider whether there are any suitable alternative vacancies within the business — including in associated companies. Offer any suitable alternatives to the at-risk employee. If the employee unreasonably refuses a suitable alternative, they may lose their right to a redundancy payment. If they accept, they are entitled to a 4-week trial period.

If after consultation redundancy cannot be avoided, write to the employee confirming their redundancy. The letter must include: the reason for redundancy; the notice period (or payment in lieu); the last day of employment; the amount of statutory redundancy pay; and their right of appeal.

Statutory redundancy pay is calculated based on age, length of service (up to 20 years), and weekly pay (capped at £751 per week from April 2026). The calculation is: 0.5 week's pay per year worked under age 22; 1 week's pay per year worked aged 22–40; 1.5 week's pay per year worked aged 41+. Employees must have 2 years' service to qualify. Pay must be made on or before the last day of employment.