Redundancy for Employers - Butcher & Barlow LLP

The redundancy process can be tough, with the welfare of your employees to consider as well as various legal and practical issues. Our Redundancy Solicitors for employers can guide you through the redundancy process, ensuring that your legal responsibilities are fulfilled and there is a fair outcome for both parties.

At Butcher & Barlow, our specialist Redundancy Lawyers are driven by their legal expertise and determination to secure the best possible outcome for our clients. We will take the time to understand your commercial goals and how you want the redundancy process to be handled.

Have a question? Please see our redundancy FAQs or get in touch.

Our experts can help you with matters including:

Redundancy consultation process
Selection criteria for redundancy
Alternative employment
Managing collective redundancies
Notice periods
Redundancy pay
Settlement agreements

Contact our Solicitors for redundancy in the North West of England

To discuss our redundancy services for employers and access specialist legal support, please contact us at Butcher & Barlow.

You can call us on 0161 764 4062 or email enquiries@butcher-barlow.co.uk.

Our redundancy services for employers

Redundancy consultation process

If you are making redundancies as a business, you have a legal obligation to hold a redundancy consultation with your employees.

Before starting the consultations, if you are making over 20 people redundant, you must notify the Redundancy Payments Service (RPS).

The deadline depends on the number of proposed redundancies.

If there are between 20 and 99 redundancies, you must notify the RPS 30 days before the first dismissal.

If there are 100 or more redundancies, you must notify the RPS 45 days before the first dismissal.

Once you have notified the RPS, your redundancy consultation should cover issues such as:

Why you are making some employees redundant.
How you chose the employees who will be made redundant.
What form of support you may provide to affected staff.
What possible alternatives can be considered instead of redundancies.
Any other concerns that arise for the affected employees.

Our Redundancy Solicitors can support you throughout the redundancy consultation process, ensuring that it is handled in line with the relevant laws and doesn’t open you up to potential disputes further down the line.

Selection criteria for redundancy

During the redundancy process, it is important to have a fair selection process otherwise, you may open the business up to potential legal action due to discrimination.

The UK Government website has the following guidance on what would be considered fair and unfair criteria for redundancy.

Examples of fair selection criteria include:

Skills, qualifications and aptitude.
Standard of work and/or performance.
Attendance.
Disciplinary record.

Examples of unfair selection criteria include:

Pregnancy, including all reasons relating to maternity.
Family, including parental leave, paternity leave (birth and adoption), adoption leave or time off for dependants.
Acting as an employee representative.
Acting as a trade union representative.
Joining or not joining a trade union.
Being a part-time or fixed-term employee.
Age, disability, gender reassignment, marriage and civil partnership, race, religion or belief, sex and sexual orientation.
Pay and working hours, including the Working Time Regulations, annual leave and the National Minimum Wage.

Our Redundancy Solicitors can provide advice and guidance on choosing the selection criteria to ensure that it would not be legally considered discriminatory and is fair to your employees.

Alternative employment

Employers are legally required to consider offering suitable alternative employment to employees facing redundancy. This may include a different role within the same organisation, a position in a different location or with an alternative company.

Employees have the right to accept or decline these offers, but rejecting a suitable alternative without a valid reason could impact their eligibility for statutory redundancy pay.

Whether a job is suitable depends on:

How similar the work is to the employee’s current role.
The terms of the job being offered.
Their skills, abilities and circumstances in relation to the job.
The pay (including benefits), status, hours and location.

If you can offer your employees an alternative job then you should, as offering alternative employment can prevent claims for unfair dismissal.

Our Redundancy Solicitors can advise on the suitability of your alternative employment options and offer advice on how to go about this process.

Managing collective redundancies

Collective redundancies have their own process that employers must follow when planning to dismiss 20 or more employees within 90 days.

This process is regulated by UK redundancy law to ensure fairness and transparency.

Key steps include notifying the Redundancy Payments Service (RPS), engaging in consultation with employee representatives or trade unions, and providing information on the reasons for redundancies, selection criteria, and alternative employment options.

You must also consider ways to minimise redundancies and mitigate their impact. Failure to comply can result in legal penalties and claims for unfair dismissal.

Our Redundancy Solicitors can help you navigate the process of collective redundancies, ensuring they are managed fairly and legally and protect your business.

Notice periods

Employees are entitled to a notice period that depends on the length of their employment.

The notice period provides them with time to prepare for the end of their employment and look for alternative opportunities.

During this notice period, employees will continue to receive their regular pay and benefits.

Our Redundancy Solicitors can assist with calculating notice periods and assisting your business with the transition.

Redundancy pay

Employees who have worked for their current employer for two years or more are entitled to statutory redundancy pay.

The amount of this pay is based on factors including age, length of service, and weekly earnings. The government has a calculator to help employees determine their entitlement.

It is important to note that statutory redundancy pay is a minimum and only applies if the contract of employment does not have a clause on redundancy payments.

If your employee’s contract does have a clause on redundancy pay, our Redundancy Solicitors can assist with calculating this pay, the process of distributing this pay and managing the transition.

Settlement agreements

Settlement agreements can be used in redundancies to mutually agree on the terms of an employee’s departure.

These legally binding contracts typically offer financial compensation in exchange for the employee waiving their rights to pursue legal claims, such as unfair dismissal. For the agreement to be valid, employees must receive independent legal advice.

Our Solicitors can help you negotiate settlement agreements to ensure a smooth and amicable exit, avoiding potential disputes and litigation.

Frequently asked questions about redundancy

What is redundancy?

Redundancy can happen when an employer needs to reduce their workforce because a job role is no longer necessary. This can be due to various reasons, such as business closures, relocations, or technological changes.

Employees selected for redundancy are entitled to certain rights, including redundancy pay, a notice period, and the option to seek alternative employment within the company.

Redundancy is governed by employment law, ensuring fair treatment and adequate compensation for affected employees.

What are the rights of employees during redundancy?

Employees have several rights during redundancy. They are entitled to a consultation period with their employer, where the reasons for redundancy and potential alternatives are discussed.

Employees with at least two years of continuous service are eligible for statutory redundancy pay. They must also receive proper notice based on their length of service or pay in lieu of notice.

Employers should offer suitable alternative employment if available. Employees also have the right to reasonable time off to look for new work or undergo training.

Unfair dismissal claims can be made if the UK redundancy process is not properly followed.

Are employers obliged to pay redundancy?

At a minimum, employers will need to pay statutory redundancy pay to employees who have at least two years of continuous employment and are being made redundant.

The amount depends on the employee’s age, length of employment, and weekly pay.

If there are specific terms related to redundancy in the employment contracts, your employees may be entitled to more than statutory pay – called contractual redundancy pay.

However, if there are no redundancy clauses in the contract, you will most likely need to pay statutory redundancy pay.

If your company has gone out of business, your employees will still be owed statutory redundancy pay and holiday pay. However, they will have to claim it from the Insolvency Service rather than from the business.

Employees should use this service to claim money if they are owed a redundancy payment or other money, such as wages, holiday and commission.

What is a redundancy consultation?

A redundancy consultation is a mandatory part of the redundancy process in which employees are informed that they may potentially be made redundant.

Several issues should be discussed in a redundancy consultation, including:

Why you are making some employees redundant.
How you chose the employees who will be made redundant.
What form of support you may provide to affected staff.
What possible alternatives can be considered instead of redundancies.
Any other concerns that arise for the affected employees.

How is redundancy pay calculated?

The amount of statutory redundancy pay an employee will receive is determined by:

Their length of employment in the job.
Their age during each year of employment.
Their current salary, capped at £700 per week in 2024/25.

There is a maximum total redundancy payment limit, set at £21,000 in 2024/25, regardless of how your employee earns.

The calculation considers a maximum of 20 years of service, with only complete years of continuous service taken into account.

It is important to note that statutory redundancy pay is a minimum and only applies if the contract of employment does not have a clause on redundancy payments.

Can employees appeal a redundancy decision?

If employees feel the employment process wasn’t handled correctly, they have several options to appeal.

They would start by speaking to their employer to establish if you have an internal appeals process in place.

They will then be encouraged to write to notify you as soon as possible, including information about the issues they had with the redundancy process.

As an employer, it is often useful to arrange a meeting to discuss the appeal and the employee should be given the opportunity to explain how they believe the redundancy process was incorrectly handled.

You can then then consider the outcome of the appeal. If you accept the appeal, the employee may be offered their job back on their previous contract or a new contract with the same terms.

What are the steps for avoiding redundancy?

As an employer, there are some steps you can take to avoid redundancy, including:

Reducing external recruitment.
Reducing overtime.
Retraining
Making savings in other areas of the business.

There are also several voluntary arrangements that you can offer your employees, including:

Job shares.
Sabbaticals/career breaks.
Flexible working requests to reduce working hours.
Early retirement.
Voluntary redundancy.

If you need assistance with the best steps to take to prevent redundancies, our Solicitors can offer you redundancy legal advice tailored to the individual circumstances of your business.