Nobody starts a business dreaming of the day they'll have to make someone redundant. It's one of the hardest conversations an owner will ever have — not because the paperwork is complicated, though it can be, but because it means telling someone who trusted you with a chunk of their working life that their role no longer exists. Most owners have never been trained for this. They just have to do it, once, badly, and learn.
Redundancy is about the role, not the person
The first thing worth being honest with yourself about: genuine redundancy is about a role disappearing — because the work has gone, the business has restructured, or a function is no longer needed — not about a person underperforming. If the real issue is someone's performance, that's a different, separate process, and treating a performance problem as a redundancy to avoid the harder conversation is both unfair to them and legally risky for you. Get the diagnosis right before anything else.
Get the process right, not just the outcome
In the UK, a fair redundancy process generally means a genuine business reason, a fair way of selecting who's affected if it's not a whole-role removal, real consultation before the decision is final rather than after, and consideration of suitable alternative roles if any exist. Skipping the consultation step — deciding first and 'informing' second — is one of the most common ways owners turn a difficult but lawful redundancy into an expensive unfair dismissal claim. The process feels slow when you're already stressed about it. It's slow for a reason.
The legal process exists to force you to actually think it through before you act, not just to protect the employee — it protects you from a decision you made in a rush you'll regret in six months.
Having the actual conversation
When it comes to the conversation itself, resist every instinct to soften it into vagueness. Be clear early — 'I need to tell you that your role is at risk of redundancy' — rather than building up to it through small talk that only prolongs the anxiety. Explain the genuine business reason honestly. Give them space to react badly, because it's a genuinely bad piece of news, and don't take a difficult reaction personally. And know your numbers before you walk in: notice period, redundancy pay if applicable, and what happens next, because vague answers to practical questions make an already hard moment feel chaotic and unfair.
What you owe the rest of the team
The conversation with the person leaving isn't the only one that matters. The team who stay are watching closely — how you've handled it becomes the story of what kind of employer you are, told and retold long after the person has gone. Handle it with genuine care, honesty and fairness, and it says something true about the business, even in a hard moment. Handle it badly, and the damage to trust with everyone still there often costs more than the redundancy was meant to save.
The practical support that actually helps
Beyond the legal minimum, a handful of small, practical gestures do a disproportionate amount to soften a genuinely hard moment: a fair, honest reference given without being asked twice; time off during notice to attend interviews; a clear, written summary of exactly what they're owed and when it'll be paid, so they're not chasing you for answers in the weeks after. None of this is required. All of it is remembered — by the person leaving, and by everyone still watching how you handled it.
Getting the timing and numbers right
A surprising amount of unnecessary distress comes from getting the practical basics wrong or leaving them vague for too long. Work out redundancy pay, notice pay and any outstanding holiday accurately before the conversation, not after — turning up without firm numbers, then having to correct them later, reads as either incompetence or bad faith, neither of which is the impression you want to leave. If you're unsure how the calculations work, particularly for longer-serving staff where statutory redundancy pay scales with length of service, get it checked by an accountant or HR adviser beforehand rather than guessing and hoping it's close enough.
When it's the founder who's hit hardest
It's worth naming the part nobody warns new owners about: this often affects the founder as much as the employee, just differently. Guilt, second-guessing the decision for weeks afterwards, replaying the conversation. That's a normal reaction to doing something hard and necessary, not a sign you got it wrong. The businesses that come through a redundancy round in the best shape are usually run by owners who let themselves feel the weight of the decision rather than pretending it was purely operational — and who used that discomfort as a reason to get the process right, rather than a reason to rush through it and move on.
Why the hard route is the right one
It would always be quicker to skip consultation, avoid the awkward conversation, and just tell someone it's over. It's also how owners end up with tribunal claims, a shaken remaining team, and — worse, if you're an even remotely decent employer — the knowledge that you handled someone's livelihood badly when a bit more care would have cost you very little extra. Slow down, do it properly, and treat it with the weight it deserves. It's one of the very few business decisions where doing it right and doing it kindly are, genuinely, the same thing.
Common questions
How much statutory redundancy pay do I have to give?
It depends on age and length of service, and only employees with at least two years' continuous service qualify at all. You pay half a week's pay for each full year worked while under 22, one week for each full year between 22 and 40, and one and a half weeks for each full year aged 41 or over. Service counts for a maximum of 20 years, and weekly pay is capped at £751 for redundancies on or after 6 April 2026, which puts the statutory maximum at £22,530. Statutory redundancy pay is free of income tax and National Insurance, and the £30,000 exemption also covers other non-contractual termination payments. Check the employment contract before you calculate anything: an enhanced scheme written into it is legally binding on you.
How long does redundancy consultation have to take?
For one or two roles there is no fixed minimum, but the consultation has to be genuine — held before the decision is final, with enough time for the employee to respond and for you to actually consider what they say. In practice that is two or three meetings across a couple of weeks, not a single conversation. Propose 20 or more redundancies at one establishment within 90 days and collective consultation bites: at least 30 days before the first dismissal for 20 to 99 redundancies, 45 days for 100 or more, plus form HR1 to the Insolvency Service, which is a criminal offence to skip. Get collective consultation wrong and a tribunal can award a protective award, which rose from 90 to 180 days' pay per employee on 6 April 2026.
Can I make someone redundant if they have been here less than two years?
You can, with less exposure than you will have shortly — but that window closes on 1 January 2027, when the unfair dismissal qualifying period drops from two years to six months under the Employment Rights Act 2025, and it applies to people already on your payroll. Even today, short service is not a free pass: discrimination claims, automatically unfair dismissal claims covering pregnancy, whistleblowing and trade union activity, and breach of contract claims all have no qualifying period at all. Under two years there is no statutory redundancy pay, but statutory notice still applies from one month's service. And the process you use is the one the rest of your team will judge you by, whatever the law currently permits.
Do I have to offer alternative work, and what if they turn it down?
Yes — where suitable alternative employment exists anywhere in your business or an associated company, you must offer it, and failing to look is a common reason redundancies are found unfair. The employee gets a four-week statutory trial period in the new role without losing their redundancy rights. If they unreasonably refuse a genuinely suitable offer they can lose statutory redundancy pay, but 'suitable' is judged objectively on pay, status, hours, location and skills, and 'unreasonable' is judged from their position, including personal circumstances. Put every offer in writing with the full detail and record the reason for any refusal. Note too that employees on maternity, adoption or shared parental leave have priority for suitable alternative roles, and that protection runs for 18 months from the birth.
What if the business genuinely cannot afford the redundancy payments?
There is no state fund for a solvent business that is simply short of cash — the Insolvency Service's Redundancy Payments Service only steps in once a company is formally insolvent, in administration or liquidation. So while you are still trading, the realistic options are to agree a written, dated payment schedule with the employee, or to delay the process until you can fund it properly. What you must not do is dismiss and hope. Unpaid statutory redundancy pay is a straightforward tribunal claim you will lose, and directors who keep trading while knowing the company cannot meet its obligations can be held personally liable for wrongful trading. If you are anywhere near that line, take insolvency advice this week rather than next quarter.
