Reviewed by Adeel Bashir, Commercial Solicitor, Nouveau Legal (Middlesbrough and nationwide) Last updated: 14 August 2026

The short answer

A fair redundancy process in the UK has six stages: establish a genuine redundancy situation, define the selection pool, apply objective selection criteria, consult meaningfully with every affected employee, consider suitable alternative employment, and then confirm the dismissal in writing with a right of appeal. If you are proposing 20 or more redundancies at one establishment within 90 days, you must also consult employee representatives for a minimum of 30 days (45 days for 100 or more) and file form HR1 with the Insolvency Service. Getting the process wrong is now considerably more expensive than it was: from 6 April 2026 the maximum protective award for failing to consult collectively doubled from 90 to 180 days’ gross pay per affected employee, and from 1 January 2027 the unfair dismissal qualifying period drops from two years to six months while the compensation cap disappears altogether.

That last point matters more than almost anything else in this article. The pool of employees who can challenge a redundancy is about to widen dramatically, and the ceiling on what a tribunal can award is coming off.

What counts as a genuine redundancy in UK law?

Redundancy is a specific legal concept, not a general label for “we need to let someone go”. Under section 139 of the Employment Rights Act 1996, a dismissal is by reason of redundancy where it is wholly or mainly attributable to one of three situations:

The business is closing down entirely
The workplace where the employee is employed is closing
The requirement for employees to do work of a particular kind has ceased or diminished, or is expected to

That third limb is where most disputes arise. The test is whether the requirement for employees to do that work has reduced, not whether a particular person is underperforming. If the real reason is capability, conduct or personality, calling it redundancy will not survive scrutiny at tribunal, and it exposes you to an unfair dismissal claim that could otherwise have been managed properly.

A useful sense-check we give clients: if you would still need someone doing this role next quarter, and you are simply hoping a different person does it, that is not a redundancy.

The redundancy process step by step

Step 1: Plan, and document the business case

Before you speak to anyone, write down why the role or roles are going. Falling revenue, a lost contract, a restructure that removes a function, automation of a task. Keep the underlying figures. Tribunals rarely second-guess a commercial decision, but they will ask whether the decision was genuinely made before the process started rather than reverse-engineered afterwards.

Also consider alternatives at this stage and record that you did: recruitment freezes, reducing overtime, ending contractor arrangements, voluntary redundancy, reduced hours. Being able to show you looked at alternatives is a recurring factor in reasonableness findings.

Step 2: Define the selection pool

The pool is the group of employees from which the redundancies will be selected. There is no statutory formula. The question a tribunal asks is whether the employer applied its mind to the issue and reached a pool within the band of reasonable responses.

Common mistakes we see:

Drawing a pool of one when other employees do interchangeable work
Excluding a whole team because “they are busy” without evidence
Letting the pool follow the person you have already decided to lose

If roles overlap in function, skills or location, they usually belong in the same pool.

Step 3: Apply objective selection criteria

Score the pool against criteria that can be evidenced. Typical criteria include skills and qualifications, performance against recorded objectives, disciplinary record and attendance record. Each should be measurable from documents you already hold.

Avoid anything that could be discriminatory in effect. Attendance records that include pregnancy-related or disability-related absence, or “last in first out” used alone (which tends to disadvantage younger workers) are both risky. Subjective criteria such as “attitude” or “fit with the future direction of the business” are the single most common reason a scoring exercise falls apart under cross-examination.

Note also the enhanced protection introduced in April 2024: employees who are pregnant, or within 18 months of the birth of a child, or returning from adoption or shared parental leave, have priority over other redundant employees for any suitable alternative vacancy. This is a genuine ranking right, not a duty to consider them equally.

Step 4: Consult meaningfully

Consultation must happen while proposals are still proposals. A meeting where you announce a decision is not consultation, and tribunals can spot the difference in the wording of the invitation letter.

For individual redundancies, run at least two meetings: one to explain the situation, the pool, the criteria and the employee’s provisional scores, and one to respond to what they raised. Give the employee their own scores in advance so they can challenge them. Allow enough time between meetings for a real response.

For collective redundancies, the thresholds are fixed:

Number of proposed redundancies at one establishment in 90 days	Minimum consultation period before first dismissal takes effect	Consult with	Notify Insolvency Service (form HR1)
Fewer than 20	No statutory minimum, but individual consultation must still be meaningful	Each affected employee	Not required
20 to 99	30 days	Recognised trade union, or elected employee representatives	Yes, at least 30 days before first dismissal
100 or more	45 days	Recognised trade union, or elected employee representatives	Yes, at least 45 days before first dismissal

Failing to file HR1 is a criminal offence, not merely a civil risk. Failing to consult collectively can trigger a protective award, and since 6 April 2026 that award can reach 180 days’ gross pay per affected employee, double the previous 90-day maximum. For a 25-person collective redundancy on average salaries, that is the difference between a six-figure and a mid-six-figure exposure.

Step 5: Look for suitable alternative employment

You have a positive duty to search for alternative roles across the whole business, including associated companies within a group. Send the employee open vacancy lists rather than deciding for them what would suit.

If an employee accepts an alternative role that differs from the old one, both sides get a statutory four-week trial period. If the role turns out not to be suitable and they leave within that window, their redundancy entitlement is preserved. If they unreasonably refuse a genuinely suitable offer, they can lose the right to statutory redundancy pay, though “unreasonably” is judged from the employee’s perspective including personal circumstances.

Step 6: Confirm in writing, pay correctly, and offer an appeal

The dismissal letter should set out the reason, the termination date, notice arrangements, the redundancy payment calculation and the right to appeal. An appeal is not strictly a statutory requirement in redundancy, but omitting it is a straightforward way to make an otherwise defensible dismissal look unfair.

How much is statutory redundancy pay in 2026?

Employees with two or more years’ continuous service qualify for a statutory redundancy payment. The calculation is based on age, length of service (capped at 20 years) and weekly pay:

Age during each year of service	Entitlement per year
Under 22	Half a week’s pay
22 to 40	One week’s pay
41 and over	One and a half weeks’ pay

For dismissals on or after 6 April 2026, the weekly pay figure is capped at £751, giving a maximum statutory redundancy payment of £22,530. The cap rose from £719 and £21,570 respectively, an uprating of 4.5% in line with the September 2025 RPI figure.

Statutory redundancy pay is separate from notice pay, accrued holiday and any contractual enhanced scheme. Check your contracts and staff handbook before you calculate anything: an enhanced redundancy scheme that has been applied consistently for years can become contractual by custom and practice even if it was never written down as such.

The first £30,000 of a genuine redundancy payment is generally free of income tax and National Insurance, but payments in lieu of notice are taxable in full. Getting this split wrong on a settlement is a common and avoidable cost.

What is changing in 2027, and why you should care now

Three changes under the Employment Rights Act 2025 reshape the risk calculation:

Unfair dismissal qualifying period falls to six months (1 January 2027). Today most employees need two years’ service to bring an ordinary unfair dismissal claim. From January 2027 that becomes six months. Practically, anyone employed on or before 1 July 2026 will already have the necessary service on day one of the new regime.

The unfair dismissal compensation cap is removed (1 January 2027). The current cap of the lower of 52 weeks’ pay or a statutory maximum disappears. Compensation becomes a function of actual loss, which for a senior or hard-to-replace employee can be substantial.

An organisation-wide collective redundancy threshold (expected 2027). The current 20-employee trigger applies “at one establishment”. The Act adds a second trigger counting redundancies across multiple establishments. The Government consultation on where to set that number closed on 21 May 2026, with options ranging from a fixed figure of 250 to 1,000, or a tiered obligation based on headcount. Multi-site employers who currently sit below the threshold at each individual site should watch this closely.

The takeaway for any UK employer: a process that was low-risk in 2025 because most of the affected staff had under two years’ service will not be low-risk in 2027. Build the habit now.

Do I need a solicitor for a redundancy process?

Not always. A single redundancy from a straightforward pool, with an employee who has no protected characteristic in play and a clear commercial rationale, is usually manageable in-house with a good template pack.

You should take advice where any of the following apply:

You are proposing 20 or more redundancies, or you operate across multiple sites
Any affected employee is pregnant, on family leave, disabled, has raised a grievance or has blown the whistle
You have a recognised trade union or need to arrange employee representative elections
You want to offer a settlement agreement rather than run a full process
The role is senior, or the employee has an enhanced contractual redundancy entitlement
You are making redundancies as part of a sale, purchase or restructure where TUPE may apply

That last one catches people out regularly. Redundancies made because of a transfer, rather than for an economic, technical or organisational reason, are automatically unfair.

A settlement agreement is often the cleanest route where the relationship has already broken down. Conversations about settlement can be held on a protected basis under section 111A of the Employment Rights Act 1996 in ordinary unfair dismissal cases, but that protection does not extend to discrimination claims or where there is improper behaviour, so the framing of the conversation matters.

Frequently asked questions

How long does a redundancy process take in the UK? For an individual redundancy, typically two to four weeks from the first consultation meeting to the dismissal decision, plus the employee’s notice period. For 20 to 99 redundancies, a minimum of 30 days of collective consultation before the first dismissal takes effect, and 45 days for 100 or more.

Can I make someone redundant while they are on maternity leave? Yes, if there is a genuine redundancy situation and the selection is not connected to the pregnancy or leave. But employees who are pregnant or within 18 months of a child’s birth have priority over other redundant colleagues for suitable alternative vacancies, and dismissal for a reason connected to pregnancy or maternity is automatically unfair and discriminatory.

Do I have to offer voluntary redundancy first? There is no legal obligation, but inviting volunteers is strong evidence that you looked for alternatives to compulsory redundancy. You are entitled to refuse a volunteer whose skills you need to retain, provided you can justify that decision.

What is a protective award and how much is it? It is a tribunal award against an employer that fails to consult collectively when required. From 6 April 2026 it can be up to 180 days’ gross pay per affected employee, doubled from the previous maximum of 90 days.

Can an employee appeal a redundancy decision? There is no absolute statutory right of appeal in redundancy, but offering one is standard good practice and its absence is regularly cited by tribunals as a factor in finding a dismissal unfair.

What is form HR1 and when do I file it? HR1 is the advance notification of redundancies filed with the Insolvency Service. It is required where 20 or more redundancies are proposed at one establishment within 90 days, and must be submitted at least 30 days before the first dismissal (45 days where 100 or more are proposed). Failure to file is a criminal offence.

Get the process right the first time

Redundancy is one of the few areas of employment law where the paperwork genuinely determines the outcome. The same commercial decision, handled two different ways, can end in a clean exit or a tribunal claim with no compensation ceiling.

Nouveau Legal provides fixed-fee employment law and HR support to UK startups, SMEs and corporates, including redundancy process design, consultation scripts and letter packs, scoring matrices, settlement agreements and collective consultation strategy. We work in plain English, quote before we start, and tell you when you do not need us.

If you are planning a restructure, book a call with our commercial team before you speak to your staff. The cheapest point to fix a redundancy process is always before it begins.

Redundancy Process UK: The 2026 Step-by-Step Guide for Employers