Run a fair redundancy process in a small team

Confirm that the work creates a redundancy situation

Redundancy concerns the employer's need for work, roles or a workplace. Start with the business change: what work is reducing or ending, which function may close, or why fewer people are needed to do work of a particular kind. Write that down before naming anybody who might leave.

Do not use redundancy as a route around performance, conduct or relationship problems. If the role continues and the real concern is the person doing it, pause and use the correct process. Calling the outcome redundancy will not repair a decision that was about something else.

Identify the legal employer and the people whose work may be affected. A small company with informal job titles may still have two people doing substantially interchangeable work. The written proposal should match the work as it actually operates, not only the organisation chart.

Explore alternatives before proposing dismissals

List realistic ways to avoid or reduce compulsory redundancies. Options may include stopping recruitment, reducing overtime, ending suitable temporary work, seeking volunteers, retraining, moving work, reducing hours by agreement or using lay-off and short-time working where the contract and rules allow it.

Do not promise that an alternative is safe or cost-free. Check contracts, equality effects and employee agreement. Voluntary redundancy is still a dismissal and the employer does not have to accept every volunteer. A reduced-hours arrangement changes terms and needs a clear duration and review.

Share the alternatives already considered when consultation begins. Employees often understand the work well enough to suggest a different saving or structure. The GOV.UK alternatives guide gives a useful starting list.

Define the affected roles and selection pool

If more people do the affected kind of work than the business needs, propose a selection pool. Explain why those roles are in it and why other apparently similar roles are not. A pool of one can sometimes be reasonable for a genuinely unique disappearing role, but it still needs an honest rationale and consultation.

Choose criteria that relate to the future work and can be evidenced. Skills, qualifications, documented performance and disciplinary records may be relevant when defined carefully. Attendance needs particular care. Do not count absences connected with disability, pregnancy or maternity in a way that creates unlawful disadvantage. Length of service on its own can create age-discrimination risk.

Set the criteria, weighting, evidence and scorer before scoring begins. Give affected employees enough information to understand and challenge factual errors without exposing another person's private information.

Consult while the proposal can still change

Tell each affected employee why redundancies are being considered, the roles and numbers affected, the proposed pool and criteria, the timetable and the alternatives considered. Invite questions and counter-proposals, investigate them and explain what changes or why the proposal remains.

There is no fixed statutory length for an individual consultation where fewer than 20 redundancies are proposed, but it must be genuine and fair. Leave enough time for the employee to understand the proposal, respond and see material changes before a final decision. Acas describes meaningful consultation in Great Britain; nidirect provides the Northern Ireland route.

Collective rules apply when 20 or more redundancies are proposed at one establishment within 90 days. Both jurisdictions use a minimum 30-day period for 20 to 99 proposed dismissals. For 100 or more, Great Britain uses 45 days and Northern Ireland uses 90 days. Notification, representatives and protective awards also need the correct national process. If the number may reach the threshold, get specialist advice before announcing dates.

Apply the criteria and hear the response

Score only against the stated criteria and evidence. Use more than one scorer where practical, moderate obvious inconsistencies and preserve the working. Avoid impressions such as “culture fit”, “attitude” or “future potential” unless they have been turned into relevant, observable evidence that can be applied fairly.

Share the employee's own provisional result and enough explanation to let them respond. Correct service dates, qualifications, performance evidence or absence categories that are wrong. Consider whether a criterion or its application disadvantages a protected group and whether it should be changed.

Consultation continues after a provisional selection. A spreadsheet does not make the decision by itself. Record the employee's challenge, the evidence checked and any change to the result.

Search for suitable alternative work

Look for suitable vacancies throughout the organisation and associated employers before the current role ends. Consider the work, pay, status, hours, location, skills and the employee's circumstances. Make an offer in writing and early enough for it to begin within the required period.

An employee who accepts suitable alternative work normally has a four-week statutory trial. A longer trial for retraining needs written agreement. The official suitable-work guide explains the current rules.

In Great Britain, employees who are pregnant or within the protected period after specified family leave have priority for a suitable alternative vacancy. Where the protection applies, the employer must offer the suitable role rather than making the employee compete for it. Check the current protected-rights guidance before filling vacancies.

Northern Ireland protection is different and depends on the leave. The current nidirect guidance gives priority to suitable alternative work when an employee is made redundant during statutory maternity leave or statutory adoption leave. Check the applicable local entitlement, rather than applying Great Britain's extended protected periods to a Northern Ireland employee.

Decide, give notice and offer an appeal

Reach the final decision only after considering consultation responses, corrected evidence, alternatives and vacancies. Confirm the business reason, selection result, response to material points, final employment date, notice arrangement, payments and appeal route in writing.

Give the contractual or statutory notice that applies, whichever is longer. Decide whether notice will be worked, spent on garden leave or paid in lieu under an applicable term or agreement. Use the notice period calculator and keep the calculation inputs with the decision.

Offer an appeal and, where reasonably possible, have it heard by somebody not responsible for the original decision. The appeal should be able to correct the pool, evidence, scoring, procedure or vacancy decision. Confirm its outcome and reasons in writing.

Calculate the payments and close the record

Keep the money in separate lines: statutory redundancy pay where eligible, any contractual enhancement, notice pay, accrued untaken holiday, ordinary final pay and agreed deductions. Statutory redundancy pay normally requires two years' continuous employment and uses age, complete years of service and a capped week's pay. The annual caps differ between Great Britain and Northern Ireland, so use the current GOV.UK or nidirect figure rather than copying a rate into a policy.

Give the employee a calculation they can follow. Align the final date across the outcome letter, payroll, P45, notice record and access plan. Preserve the proposal, consultation notes, selection evidence, vacancy search, decision, appeal and payments with proportionate access controls.

Close the process with practical support: time to ask final questions, the agreed reference route, and clear property and access arrangements. An employee with at least two years' continuous employment by the end of notice is entitled to reasonable time off during notice to look for work or arrange training. Statutory payment for that time is capped at 40% of one week's pay in both Great Britain and Northern Ireland. Check the Great Britain or Northern Ireland route for the employee. A fair ending is part of the process, not an optional extra after the legal steps.