A Complete Guide for Employers and Employees in England and Wales
At Blackstone Solicitors, we regularly advise on the redundancy process for less than 20 employees across England and Wales. While smaller scale redundancies do not trigger collective consultation rules, employers must still follow a fair and lawful process.
There is a common misconception that fewer than 20 redundancies means fewer obligations. In reality, individual consultation and fair selection remain essential. Failure to follow a proper process can lead to claims for unfair dismissal and, in some cases, discrimination.
This guide explains how the redundancy process works where fewer than 20 employees are affected, and what both employers and employees should expect.
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What is a Redundancy
Understanding the Legal Definition
A redundancy arises where there is a reduced need for employees to carry out work of a particular kind.
This may happen where:
- A business closes or relocates
- A workplace shuts down
- There is a reduced requirement for certain roles
- The business restructures
The key point is that redundancy relates to the role, not the individual.
If the role still exists but the employee is replaced, the dismissal is unlikely to be a genuine redundancy.
Redundancy Process for Less Than 20 Employees
What Changes Compared to Larger Exercises
Where fewer than 20 employees are being made redundant within a 90 day period, collective consultation rules do not apply.
This means employers are not required to:
- Consult with trade union representatives
- Follow minimum consultation periods of 30 or 45 days
- Notify the government in advance
However, individual consultation is still required. Employers must engage directly with each affected employee and follow a fair process.
The absence of collective consultation does not remove the need for fairness.
Step 1 Identifying the Need for Redundancy
Establishing a Genuine Business Reason
The process begins with identifying a genuine redundancy situation.
Employers should be clear about:
- The business reasons for change
- Why certain roles are affected
- Whether the need for work has reduced
Documenting this reasoning is important. It helps demonstrate that the redundancy is genuine and not a pretext for dismissal.
Step 2 Identifying the Pool for Selection
Who is at Risk
Employers must identify a pool of employees from which redundancies will be selected.
This may include:
- Employees doing the same or similar roles
- Employees with interchangeable skills
- Teams affected by restructuring
Choosing the correct pool is critical. An artificially narrow pool can make the process unfair.
Employees should be informed of the proposed pool and given an opportunity to comment.
Step 3 Fair Selection Criteria
Objective and Transparent Scoring
Where more than one employee is at risk, employers must apply fair selection criteria.
Common criteria include:
- Skills and qualifications
- Performance and productivity
- Attendance records
- Disciplinary history
Criteria should be objective and measurable wherever possible.
Employers should avoid subjective assessments without supporting evidence. Scoring should be documented and consistent across all employees in the pool.
Step 4 Individual Consultation
A Key Requirement
Even in small scale redundancies, individual consultation is essential.
This involves meeting with affected employees to:
- Explain the redundancy situation
- Discuss the selection process
- Review individual scores
- Consider feedback or challenges
- Explore alternatives to redundancy
Consultation should be meaningful. It is not simply a formality.
Employees must be given an opportunity to influence the outcome.
tep 5 Considering Alternatives to Redundancy
Avoiding Dismissal Where Possible
Before confirming redundancy, employers must consider whether alternatives exist.
These may include:
- Redeployment to another role
- Adjusted working hours
- Temporary lay offs
- Voluntary redundancy options
Employers should actively explore suitable alternative employment within the organisation.
Failure to do so can render the dismissal unfair.
tep 6 Confirming Redundancy
Final Decision and Notice
If no alternatives are available, employers may proceed to confirm redundancy.
Employees should receive:
- Written confirmation of redundancy
- Notice of termination in line with their contract
- Details of redundancy pay
- Information about their right to appeal
The decision must be based on a fair process and reasonable assessment.
Redundancy Pay for Less Than 20 Employees
Statutory Entitlement
Employees with at least two years’ service are entitled to statutory redundancy pay.
This is calculated based on:
- Age
- Length of service
- Weekly pay, subject to a statutory cap
Employers may offer enhanced redundancy pay depending on contractual terms or company policy.
Notice Periods
What Employees Should Expect
Employees are entitled to notice of termination.
This may be:
- Contractual notice, if specified
- Statutory notice, based on length of service
Statutory notice is:
- One week for each year of service, up to a maximum of 12 weeks
Employers may place employees on garden leave or make a payment in lieu of notice, depending on contractual terms.
Right of Appeal
Challenging the Decision
A fair redundancy process should include a right of appeal.
Employees should be given the opportunity to challenge:
- Their selection for redundancy
- The scoring applied
- The fairness of the process
An appeal should be handled by someone not involved in the original decision, where possible.
Unfair Dismissal in Small Redundancies
Legal Risks for Employers
Even where fewer than 20 employees are affected, redundancy dismissals can still be unfair.
Common issues include:
- Lack of proper consultation
- Unfair selection criteria
- Predetermined decisions
- Failure to consider alternatives
- Incorrect redundancy pool
Employees with two years’ service may bring unfair dismissal claims where the process is flawed.
Discrimination Risks in Redundancy
Additional Legal Considerations
Redundancy processes must also avoid discrimination.
Employers must not select employees based on protected characteristics such as:
- Age
- Disability
- Sex
- Race
- Religion or belief
- Sexual orientation
Special care is needed where absence or performance is linked to disability or pregnancy.
Discrimination claims do not require two years’ service and compensation is not capped.
Redundancy During Probation
Do the Same Rules Apply
Employees on probation can be made redundant, but the process must still be genuine.
Even for short service employees, employers must avoid:
- Discrimination
- Sham redundancy situations
- Breach of contract
While unfair dismissal claims may be limited, legal risks still exist.
Documentation and Record Keeping
Why Evidence Matters
Employers should keep clear records of:
- Business reasons for redundancy
- Selection criteria and scoring
- Consultation meetings
- Consideration of alternatives
- Final decision making
Good documentation helps defend claims and demonstrates fairness.
Common Mistakes in Small Scale Redundancies
Avoiding Legal Pitfalls
Even experienced employers can make errors.
Common mistakes include:
- Treating small redundancies informally
- Skipping consultation steps
- Using subjective scoring
- Failing to explore redeployment
- Making decisions too quickly
These errors can turn a genuine redundancy into an unfair dismissal.
Why Legal Advice is Important
Managing Risk Effectively
The redundancy process for less than 20 employees may appear straightforward, but legal risks remain.
Taking advice early can help:
- Structure a fair process
- Avoid discrimination issues
- Reduce the risk of claims
- Handle employee relations sensitively
- Protect business reputation
For employees, advice can clarify whether the process has been handled lawfully.
How Blackstone Solicitors Can Help
Expert Redundancy Advice Across England and Wales
At Blackstone Solicitors, we advise employers and employees on the redundancy process for less than 20 employees across England and Wales.
We assist with:
- Planning and managing redundancy exercises
- Reviewing selection criteria and processes
- Advising on consultation requirements
- Handling redundancy disputes
- Bringing or defending unfair dismissal claims
- Negotiating settlement agreements
Our approach is practical, clear, and tailored to each client’s needs.
How to Contact Our Employment Law Solicitors
It is important for you to be well informed about the issues and possible implications of Employment Law. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.
To speak to our Employment law solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Please visit our website to see all the Employment Law services we offer: https://blackstonesolicitorsltd.co.uk/employment-law-services/
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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