How to Make Someone Redundant

Making someone redundant must follow a fair process. Learn the legal steps, notice periods, redundancy pay and how to avoid common redundancy mistakes.

Redundancy is a form of dismissal used when a role is no longer required, not because of performance, conduct or capability. It’s a difficult but sometimes necessary decision for employers. To ensure fairness and stay within the law, redundancy must follow a structured and transparent process.

This guide outlines what redundancy is, examples of valid reasons, the correct steps to follow when making someone redundant, and the legal requirements around notice and pay.

What Is Redundancy?                                  

Redundancy occurs when an employer needs to reduce their workforce due to business-related changes. A redundancy situation arises when:

  • The employer closes or intends to close the business

  • A workplace or location is closing

  • There is a reduced need for employees to do work of a particular kind

Redundancy is not about the individual, but the job they perform. If the job no longer exists or is no longer needed in the same way, it may be legally redundant.

What Are Examples of Redundancies?

Common redundancy situations include:

  • A company shutting down one of its branches

  • Business restructuring to reduce management layers

  • Automation replacing manual jobs

  • Outsourcing functions to external suppliers

  • Merging two teams and needing fewer roles

The redundancy must be genuine and based on the role, not on the person in that role.

What Steps Are Involved in Making Someone Redundant?

  1. Identify the redundancy situation – Assess the business case and ensure it’s a genuine redundancy, not a dismissal in disguise.

  2. Select roles at risk – Use fair, objective criteria such as skills, qualifications, experience or disciplinary records. Avoid discriminatory criteria.

  3. Consult with affected employees – This is a legal requirement. Even if you think redundancy is inevitable, you must consult individually (and collectively if more than 20 employees are affected).

  4. Consider alternatives – Offer suitable alternative roles if available. Employees on maternity leave or long-term sick have enhanced rights to be offered suitable alternative employment.

  5. Confirm redundancy and issue notice – Once the consultation period ends, confirm the decision in writing, giving the correct notice period and final working date.

  6. Provide redundancy pay and final pay – Include redundancy pay, notice pay, unused holiday, and a P45.

  7. Offer support – Consider offering CV support, references, or outplacement services.

How Much Notice Should Employees Get?

Employees are entitled to the longer of contractual or statutory notice, which is:

  • One week’s notice for each full year of service, up to 12 weeks

  • A minimum of one week’s notice if employed for one month to two years

You can either ask employees to work their notice or pay them in lieu (PILON). Notice pay must reflect full normal earnings.

How Does Redundancy Pay Work?

Redundancy pay is compensation for the loss of a role. If the employee has at least two years’ continuous service, they are legally entitled to statutory redundancy pay.

You may offer enhanced redundancy pay as part of your contract or a voluntary redundancy scheme.

What Is Statutory Redundancy Pay?

As of 2024–25, the calculation is:

  • Half a week’s pay for each full year under age 22

  • One week’s pay for each full year between 22 and 40

  • One and a half week’s pay for each full year over 41

Weekly pay is capped at £643, and the maximum statutory redundancy payment is £19,290.

Use GOV.UK’s redundancy pay calculator to work out the exact amount.

What Is Notice Pay?

Notice pay is the amount an employee is entitled to receive during their notice period. It is separate from redundancy pay and must include:

  • Normal salary

  • Regular bonuses or commission

  • Benefits such as pension contributions

Notice pay is subject to tax and National Insurance.

Examples of Mistakes Made During Redundancy

1. Failing to consult – Skipping consultation or treating it as a formality can lead to claims of unfair dismissal.

2. Using unfair selection criteria – Basing redundancy on protected characteristics (e.g. age, pregnancy, sickness) is unlawful.

3. Not considering alternative roles – You must offer suitable alternative vacancies if available, especially to those on maternity or shared parental leave.

4. Misunderstanding notice and pay – Not paying correct notice or redundancy amounts can lead to legal claims or tribunal costs.

5. Poor communication – Redundancy is sensitive. Be transparent, respectful, and clear to minimise confusion and preserve morale.

Final Thoughts

Redundancy should never be rushed. A well-handled redundancy process balances legal compliance with empathy and fairness. If you're making someone redundant, make sure the business case is sound, consultation is genuine, and payments are accurate.

Taking shortcuts may save time short term but can lead to costly legal disputes later. If in doubt, seek HR or legal advice to protect both your employee and your business.