Managing redundancies: a practical guide for employers

What this guide covers

This is the whole redundancy process in order, for a small or medium employer: from documenting why roles may no longer be needed, through consultation and selection, to the leaving date, the final pay and the records. At each step it says what to decide and what to have in writing. Shorter guides, linked as you go and at the end, cover each step in more detail.

It covers Great Britain only: England, Wales and Scotland. Scotland follows the same redundancy law as England and Wales for everything in this guide. Northern Ireland has its own employment law and is outside its scope. We checked it against the law in force on 9 November 2026, the date it was published. Changes announced for 2027 are marked separately and aren't yet law.

The legal duties start when you're proposing redundancies, not when you've decided. Consultation has to happen while the proposals can still change, so the first four steps below come before anyone is selected or told they're leaving.

1. Identify and document the business case

In law, a redundancy is about the work, not the person. It applies where you're closing the business, closing the place where someone works, or where you need fewer employees to do work of a particular kind, now or soon (Employment Rights Act 1996, section 139). The work doesn't have to disappear completely: a drop in demand, a lost contract or a reorganisation that spreads the same work across fewer people can all qualify.

It isn't a redundancy if the work is still there and you want someone else doing it. Performance, conduct, attendance or a breakdown in a working relationship each have their own fair process. Using redundancy to deal with one of them, for example by drawing a pool around one person, or giving the same job a new title, is likely to make the dismissal unfair, and can be discriminatory.

Write the business case down in a short, dated note: what has changed, the evidence for it (figures, a lost contract, a new structure), which kinds of work and roles are affected and why, and who will make the decisions. Describe roles, not names. It becomes the basis of everything you tell staff and representatives, and your main evidence if a decision is challenged.

2. Estimate the numbers, the establishments and the 90-day period

Next, estimate how many dismissals you're proposing, at which establishments, and over what period. Count what you're proposing, not dismissals that have already happened, and count each establishment separately over any 90-day period. Volunteers count. For the collective duty, "redundant" has a wider meaning: any dismissal for a reason not related to the individual, which can include ending contracts to bring in new terms.

An establishment isn't the same as the company. The legislation doesn't define it, and the courts have treated it as the local unit employees are assigned to carry out their work, such as a shop, depot, office or site. GOV.UK's HR1 guidance describes it as the site where an employee is assigned to work. It doesn't need its own management or the power to make redundancies. Under the current test, numbers at different establishments aren't added together, so 25 proposed redundancies spread over three sites may not trigger the collective duty, while 20 at one site does. Home-based and mobile staff, shared sites, and people assigned to more than one place make it less clear-cut. If the answer isn't obvious, take advice before you settle the timetable.

The number decides which consultation duties apply:

A future change, not yet law. The Employment Rights Act 2025 (section 29) adds a second, organisation-wide trigger alongside the 20-at-one-establishment test, with the number to be set by regulations and never lower than 20. When we checked on 9 November 2026, only the power to make those regulations was in force and no number had been set. The government's timetable expects the new trigger in 2027, listed for April 2027. We'll review this guide when the regulations are made. Until then, the establishment test above is the law.

3. Consider alternatives to redundancy

Before you settle on dismissals, look at what could avoid or reduce them, and record what you considered and why each option does or doesn't work:

• stopping recruitment, and cutting overtime, agency or contractor work
• moving people into current or expected vacancies, with reasonable training
• inviting volunteers for redundancy or reduced hours, on fair terms
• temporary lay-off or short-time working, but only where the contract allows it

This isn't a one-off box to tick. Ideas will come up in consultation, and you should keep looking for alternatives until the leaving date.

4. Plan the consultation

Individual and collective consultation are distinct. Individual consultation is part of a fair process for every employee at risk, whatever the numbers. Collective consultation is an extra legal duty with representatives, triggered at 20 or more at one establishment. In a collective case you do both: Acas suggests holding collective consultation first, then individual consultation, and the two can run alongside each other once the main points are agreed with representatives.

Then plan the rest before anyone hears about it:

• Timetable: allow time for representatives to be elected, for meetings and responses, for appeals, and for the longest notice period in the group. Holidays and leave slow things down.
• Decision-makers: who proposes, who consults, who scores, who decides, and a different person, not involved so far, to hear appeals.
• Communications: who tells whom, when and in what order. Tell people on leave or off sick at the same time as everyone else. Say "proposed" until decisions are made.
• Costs: redundancy pay, notice, holiday and any enhanced terms, for each person, not as an average. Bulk redundancy costing works it out from one spreadsheet, and the redundancy pay calculator does one person.
• Records: one dated file for the whole exercise, set up from the start.

The guide to planning a redundancy programme goes further into the timetable, who does what, and cost modelling.

5. Collective consultation, where 20 or more are proposed

Where the collective duty applies (Trade Union and Labour Relations (Consolidation) Act 1992, section 188):

• Who you consult: the appropriate representatives of the affected employees. That's a recognised trade union, if there is one for them. Otherwise it's existing employee representatives with authority to be consulted, or representatives elected for the purpose. The law sets requirements for that election, so build it into the timetable.
• When: consultation must begin in good time, and in any event at least 30 days before the first dismissal takes effect for 20 to 99 proposed redundancies, or 45 days for 100 or more. These are minimums, not targets. Acas says you mustn't decide on any redundancies before collective consultation, and no one can be dismissed before the minimum period ends, even if you reach agreement sooner.
• What about: ways of avoiding the dismissals, reducing the numbers and reducing the effect on those affected, with a view to reaching agreement. You must give the representatives set information in writing, including the reasons, the numbers and the selection method.
• HR1: a separate legal requirement (section 193). Notify the Redundancy Payments Service, part of the Insolvency Service, on form HR1 before you give anyone notice of dismissal, and at least 30 or 45 days before the first dismissal takes effect. Use a separate form for each establishment, and give a copy to the representatives. Not notifying is a criminal offence.
• If you don't consult properly, a tribunal can make a protective award of up to 180 days' pay for each affected employee, for dismissals taking effect on or after 6 April 2026 (it was 90 days before). Employees don't need 2 years' service to receive one.

Individual consultation still has to happen as well (step 6). The collective consultation guide covers representatives, the written information and the HR1 in detail, and the collective consultation checker works out the dates and includes the free collective consultation pack.

6. Consult each person individually, before any decision

Every employee at risk should be consulted individually, in collective cases as well as smaller ones. If you've already decided, it isn't consultation, and a dismissal without meaningful consultation is likely to be unfair. Acas guidance says you should be able to show that you genuinely considered every suggestion, including the ones you didn't accept.

There's no fixed minimum length for individual consultation. It needs to be long enough to be meaningful. A common pattern is:

1. Tell the employee in writing that their role is at risk, why, the proposed pool and how you propose to select, and invite them to a first meeting.
2. At the first meeting, explain the proposal, listen, and ask for their views on it, on the pool and criteria, and any ideas for avoiding or reducing redundancies. Give them time to think.
3. Share their provisional score, if you're selecting, and the current vacancies. Invite comments.
4. At a second meeting, go through their comments, your answers to each suggestion, and any alternative roles.
5. Only then decide, and tell them the outcome.

Send notes after each meeting with a chance to correct them, and answer suggestions in writing, saying why you can or can't take them up. Allowing a colleague or union representative to come with them isn't a legal requirement at consultation meetings, but it's good practice. Adjust the process for anyone who needs it, and consult people on leave or off sick too, at a time and in a way that works for them.

Don't give anyone notice of dismissal until consultation with them, and any collective consultation, has properly finished. The redundancy letters guide sets out what each letter should say.

7. Pools and selection criteria, as part of consultation

Where you need to choose between people, the pool and the criteria are proposals you consult on, not a decision made in advance. Selection should follow from the business case and the consultation, and nobody's outcome should be settled before they've had their say.

The pool is the group of employees you'd choose from. Start with everyone doing the same or similar work, and think about whether people in related roles whose work overlaps or is interchangeable should be included. A pool of one can be fair where a role is genuinely unique, but be ready to explain why nobody else was considered.

Criteria should be:

• objective and measurable, and tied to what the business needs after the change
• written down, and consulted on, before anyone is scored
• based on evidence, such as records, appraisals or qualifications, not impressions
• applied in the same way to everyone, ideally by more than one scorer

Share each person's own provisional scores with them, and give them a real chance to challenge them. Don't share anyone else's individual scores.

Selection is where discrimination risk usually sits. Watch for criteria that put a protected group at a disadvantage: length of service on its own ("last in, first out") can disadvantage younger staff, and attendance scores can penalise disability or pregnancy. Leave out absence related to disability, pregnancy or maternity, consider reasonable adjustments to the criteria for a disabled employee, and don't mark anyone down for time on family leave. Part-time and fixed-term employees mustn't be treated less favourably because of that status.

Some reasons make a dismissal automatically unfair, whatever the employee's length of service: selecting someone because of pregnancy or family leave, trade union membership or activity, acting as an employee representative, whistleblowing or raising health and safety concerns, among others. The selection guide lists them and explains how scoring should work.

8. Offer suitable alternative work

Share vacancies with everyone at risk, including people on leave, and consider whether someone could do a vacancy with reasonable training. A fair process usually needs this, whether or not you're selecting.

Some employees have priority. If an employee is pregnant, on maternity, adoption, shared parental, neonatal care or bereaved partner's paternity leave, or within the protected period after some of these, and their role is redundant, you must offer them a suitable available vacancy, with you, a successor or an associated employer, ahead of others. For pregnancy and maternity, the protected period runs from when they tell you they're pregnant to 18 months after the birth. The protected period differs by type of leave, so check Acas guidance for each person. Further protection against dismissal for pregnant women and new mothers is expected from October 2027, and isn't yet law.

When you offer another job:

• Put it in writing, before the current job ends, saying what's different: pay, hours, place, duties and status. The new job should start within 4 weeks of the old one ending.
• If the terms differ, the employee is entitled to a statutory trial period of 4 weeks from the day they start the new job. It can only be longer for retraining, by written agreement made before the trial starts, setting the end date and the terms.
• If the employee ends the trial for a reason connected with the change, or you end it for such a reason, they're treated as dismissed for redundancy from the old job, and keep their right to redundancy pay.
• If a job is suitable and the employee unreasonably turns it down, or unreasonably leaves during the trial, they can lose their statutory redundancy pay. Whether a job is suitable, and whether refusing it is reasonable, depend on the job and the person's own circumstances. Record your reasoning.

The alternative jobs and trial period guide covers this in more detail.

9. Confirm the outcome, and pay what's due

When consultation has finished and you've decided, meet the employee to tell them, then confirm it in writing. The letter should cover:

• that their role is redundant, why, and their score where selection was used
• their notice and leaving date, and whether notice is worked, paid in lieu or garden leave
• statutory redundancy pay, with a written statement of how it was worked out (Employment Rights Act 1996, section 165), and any enhanced amount
• holiday pay and any other pay owed, and when it will be paid
• paid time off to look for work or arrange training during notice
• how to appeal, to whom, and by when

Notice: give at least the statutory minimum, or the contractual notice if that's longer. The statutory minimum is one week after a month's service, then one week for each complete year from 2 years, up to 12 weeks. You can pay in lieu if the contract allows it or the employee agrees. The notice period calculator works it out, and the guide to notice when made redundant covers garden leave and leaving early.

Statutory redundancy pay: only employees qualify, and they need at least 2 years' continuous service. It's half a week's pay for each full year of service under age 22, one week's pay for each full year from 22 to 40, and one and a half weeks' pay for each full year from 41, counting back from the leaving date, up to 20 years. A week's pay follows statutory rules, usually normal weekly pay, or an average over 12 weeks where pay varies. It's capped at £751 for redundancies with a relevant date on or after 6 April 2026, so the most anyone can get is £22,530. It changes again from 6 April 2027, and that figure isn't confirmed yet, so if your timetable runs across that date, check it before you confirm anyone's pay.

Three things often change the figure. If you give less than the statutory minimum notice, for example by paying in lieu, service and age are counted to the date statutory notice would have ended, which can take someone past 2 years, a birthday or another full year. Many employers pay more than the statutory minimum under the contract, a policy or an established practice, so check what was paid last time. And the cap applies only to statutory redundancy pay, not to notice or an enhanced scheme that uses actual pay. The redundancy pay guide explains the formula.

Final pay: salary to the leaving date, notice pay, holiday built up and not taken, any bonus or commission earned under the contract, and the P45. Anyone with 2 years' service by the end of their notice is entitled to reasonable paid time off to look for work or arrange training, with the pay capped at 40% of a week's pay. Statutory and contractual redundancy pay are usually tax-free up to £30,000, while notice and holiday pay are taxed as earnings: see pay in lieu of notice and tax.

Appeals: there's no statutory right of appeal against a redundancy dismissal, but Acas says it's good practice to offer one, and a tribunal will look at whether you did. Give a reasonable deadline, ask for the grounds in writing, have someone not involved so far hear it, and confirm the outcome with reasons.

10. Keep a record of every step

Keep one dated file for each exercise, and a section for each person: the business case and the alternatives considered, the numbers and establishments, the costings, the pool and criteria, the scores and the evidence for them, meeting notes, the vacancy lists, every letter as sent, any HR1, and appeal outcomes. Keep it securely, and only for as long as you need it.

Claims can arrive well after the leaving date. Most employment tribunal claims arising on or after 1 October 2026 have a 6-month time limit, up from 3 (for breach of contract claims in Scotland the change applies from 9 November 2026), and Acas early conciliation can extend it. Employees currently need 2 years' service to claim ordinary unfair dismissal, including unfair selection. For dismissals taking effect on or after 1 January 2027, that's due to fall to 6 months, and the cap on the compensatory award is due to go. Notice given in 2026 can end in 2027, so check the leaving dates. Discrimination claims and automatically unfair reasons need no qualifying service at all.

Common mistakes

• Deciding who goes first, then working backwards to a business case and a process.
• Using redundancy to deal with performance or conduct, or drawing a pool around one person.
• Counting proposed redundancies across the whole company, or only across one site, without checking what the establishment really is.
• Treating individual consultation as optional because collective consultation is happening, or the other way round.
• Starting collective consultation late, or giving notice before the HR1 has gone in or the minimum period has run.
• Announcing a decision as final, then holding meetings afterwards.
• Scoring on impressions, or changing the criteria after seeing the scores.
• Counting disability, pregnancy or maternity-related absence in an attendance score.
• Leaving out people on maternity or other family leave, or failing to offer them priority for a suitable vacancy.
• Ignoring suggestions from employees, or not answering them in writing.
• Offering an alternative job with no written terms or trial period dates.
• Getting redundancy pay wrong: the wrong cap for the date, a missed birthday, or forgetting how pay in lieu moves the date.
• Having no appeal, or the same person hearing it who made the decision.

Your redundancy checklist

1. Identify and document the business case: what has changed, the evidence, and the kinds of work and roles affected.
2. Estimate the proposed numbers, the establishments involved and the 90-day period, and decide whether collective consultation applies.
3. Consider alternatives to redundancy, and record what you looked at.
4. Plan the consultation: individual for everyone at risk, plus collective if 20 or more at one establishment, with the timetable, the people involved and the costs.
5. If 20 or more at one establishment: arrange representatives, give them the information in writing, send the HR1 before any notice and in time, and consult for at least the minimum period.
6. Tell each affected employee in writing that their role is at risk, with the proposed pool and criteria, and invite them to consultation.
7. Consult each person meaningfully, and respond to every suggestion in writing.
8. Score against the agreed criteria, share each person's own provisional scores, and consider their challenges.
9. Share vacancies, offer suitable alternatives in writing, and give priority where it applies.
10. Run any trial periods, with written start and end dates and a review before the end.
11. Decide only after consultation, and confirm the outcome, notice, figures and appeal right in writing.
12. Pay statutory redundancy pay with a written calculation, plus notice, holiday and final pay, in the right pay run.
13. Hear any appeal with someone not involved so far, and confirm the outcome in writing.
14. Keep the whole file, dated, for at least as long as a claim could be brought.

When to get specialist advice

This is general information, not legal advice, and following it, or using our tools and packs, doesn't on its own make a process fair or lawful. Take advice from a qualified employment adviser or solicitor before you go ahead if:

• you're proposing 20 or more redundancies, you're close to that number, or you're not sure what counts as one establishment
• anyone affected is pregnant, on or recently back from family leave, or in a redundancy protected period
• anyone affected is disabled, or the selection may disadvantage people who share a protected characteristic
• the selection is contested, or there's a grievance, a whistleblowing concern or a union dispute running alongside
• redundancies are linked to a TUPE transfer, before or after it
• the business is insolvent or close to it
• you're also changing terms and conditions, as the rules on dismissing and re-engaging staff are due to change in March 2027
• the contract, a policy or past practice may entitle people to enhanced redundancy pay, or you're considering settlement agreements

Acas gives free, impartial advice on 0300 123 1100.