Supporting Employees Through Redundancy: Employer Best Practices in 2025

Supporting-Employees-Through-Redundancy

Redundancies are tough. Here’s how UK employers can handle them legally, compassionately, and without burning bridges.

For small and medium-sized businesses across the UK, redundancy is sometimes unavoidable. Whether due to economic pressures, restructuring, or digital transformation, letting staff go is one of the most challenging aspects of being an employer — and doing it wrong can result in legal trouble, reputational damage, and lasting harm to your team culture.

In 2024 alone, over 150,000 redundancy cases were recorded in the UK, and that number is expected to grow in 2025 due to ongoing market uncertainty. Many SMEs, especially those without dedicated HR departments, find themselves walking a legal and emotional tightrope when handling layoffs.

But with the right approach, you can manage redundancies fairly, legally, and with humanity.

Why This Topic Matters for UK Employers

Redundancy isn’t just about ending employment — it’s about how you do it. Poorly handled redundancies can lead to:

  • Employment tribunal claims
    Unfair dismissal, discrimination, or failure to consult claims can cost your business thousands in compensation and legal fees.

     

  • Damage to your employer brand
    Word travels fast — especially on LinkedIn, Glassdoor, and social media. Handling redundancies insensitively can hurt your reputation with both customers and potential hires.

     

  • Low morale among remaining staff
    If people see colleagues treated poorly, it erodes trust. Productivity drops, and you risk further resignations.

     

Key Legal Requirements for Redundancies in 2025

The UK redundancy process is governed by strict employment law. Whether you’re letting go of one person or a group, you must follow a fair and lawful process:

1. Genuine Redundancy Situation

A role must be genuinely redundant — for example, due to:

  • Business closure

  • Workplace relocation

  • Reduced need for a particular type of work

2. Fair Selection Process

You must use objective and non-discriminatory criteria to decide who is being made redundant. Typical criteria include:

  • Skills and qualifications

  • Performance

  • Disciplinary record

  • Attendance

3. Meaningful Consultation

Consultation is legally required, and the rules vary by number:

  • Fewer than 20 redundancies: Individual consultation with affected employees.

  • 20+ redundancies within 90 days: Collective consultation with elected employee reps or union officials.

4. Notice Periods

You must provide statutory or contractual notice depending on how long the employee has worked for you:

  • 1 month–2 years: 1 week

  • 2–12 years: 1 week per year

  • 12+ years: 12 weeks

5. Redundancy Pay

Employees with 2+ years of continuous service are entitled to:

  • 0.5 week’s pay per full year under age 22

  • 1 week’s pay per full year aged 22–40

  • 1.5 weeks’ pay per full year over age 41

The maximum weekly amount (as of April 2025): £700

Employer Responsibilities: What You Must Do

To remain compliant and minimise risk, employers must:

  • Provide clear written communication : Issue redundancy letters outlining the reason, notice period, consultation outcomes, and redundancy pay calculations.

  • Offer appeal processes : Employees have the right to appeal the decision if they believe it was unfair or improperly handled.

  • Consider suitable alternative employment : Before confirming redundancy, explore whether another role in the business could be offered to the affected employee.
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  • Issue accurate final payments : This includes salary up to the termination date, accrued holiday, and any redundancy pay.

The Challenges of Managing Redundancies Without In-House HR

Redundancy law is complex, and the emotional toll of laying off staff can cloud judgement. Here’s where many SMEs struggle:

  • Lack of up-to-date legal knowledge
     Employment law evolves regularly. Without expert advice, it’s easy to miss a new rule — and ignorance is not a defence at tribunal.

  • Inconsistent process
     Without HR templates, checklists, or documentation protocols, redundancy decisions may come across as arbitrary or unfair.

  • Communication mistakes
     The way redundancy is communicated matters. Poorly worded conversations or insensitive emails can escalate already tense situations.

  • Emotional strain
     For owners and managers, laying off staff they’ve worked with for years is emotionally draining — making it harder to remain objective.

  • No support for remaining employees
     Survivors of redundancy often experience anxiety, guilt, and demotivation. Without proper post-redundancy support, retention and morale suffer.

How ClearPath Helps You Manage Redundancies Right

ClearPath specialises in HR support for UK businesses without in-house teams. We guide you through the redundancy process from start to finish — legally, compassionately, and efficiently.

Here’s how we can support you:

Redundancy Process Planning
We create a step-by-step redundancy plan tailored to your business, ensuring legal compliance and fairness from day one.

Legally Compliant Letters and Documentation
From consultation invites to redundancy notices and final settlement letters — we handle all documentation for you, minimising legal exposure.

Employee Consultation Guidance
We coach you or lead consultation meetings, helping you deliver the message professionally and empathetically.

Risk Management and Legal Compliance
We audit your selection process, scoring matrix, and communications to ensure everything stands up to legal scrutiny.

Support for Remaining Staff
We help you rebuild morale post-redundancy with internal communication strategies, employee engagement activities, and wellness resources.

On-Demand HR Advice
Questions pop up — and we’re here when they do. Get fast access to qualified HR consultants who can guide you in real time.

The Business Benefits of Doing Redundancy the Right Way

When handled correctly, redundancies don’t have to damage your business. In fact, doing them well shows leadership and integrity.

  • Reduce legal risk and tribunal claims

  • Protect your employer brand and reputation

  • Maintain morale and performance among remaining staff

  • Demonstrate responsible leadership to clients and partners

  • Avoid costly rehiring mistakes by properly assessing business needs

Redundancy is Hard — But You Don’t Have to Do It Alone

Whether you’re facing a business restructure, economic downturn, or strategic pivot, redundancies may be necessary — but they don’t have to be damaging.

With ClearPath, you get expert HR guidance that protects your business, supports your employees, and ensures you remain compliant with UK employment law in 2025 and beyond.

 

👉 Ready to navigate redundancies with confidence? Let’s talk.

📞 Call us | 📧 Email us | 🌐 Visit clearpathuk.co.uk for your free HR consultation.