How a business handles redundancy says more about its culture than almost anything else. Big tech announcing job losses by group message or shutting staff out of systems signals a lack of care and empathy for its people and a monomaniacal prioritisation of efficiency.
Conversely, communicating redundancies transparently and engaging with those affected individually shows a company culture that prioritises honesty, accountability and the dignity of its people. Headcount reductions profoundly impact those made redundant but also colleagues left behind and managers responsible for delivering bad news. How this is handled in turn affects culture, morale, reputation and long-term business health long after P45s are sent.
We are all too aware of the commercial imperative to find efficiencies and cost-save, but there is a right way and a wrong way to do redundancy. Redundancy law in the UK is process-driven to a degree, which means it can quite easily turn into a transactional tick box exercise where organisations lose sight of the real-life impact. But whilst there are procedural steps which need to be followed, employers also have flexibility in their approach within what would be considered legally fair and reasonable.
This article explores how to manage redundancies ethically, with particular focus on the areas where businesses don’t make the effort they should.
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Planning a restructure/reorganisation
There isn’t any legal requirement around planning as such, but the law defines what is a genuine redundancy situation and the requirements of a fair redundancy process, which employers need to know and plan for before they start.
But taking a step back, an important question at the outset, which is often overlooked, is do you really need to make redundancies, and can you make fewer? Sometimes the answer is that it’s unavoidable, but sometimes there may be alternatives. Will there really be a cost-saving, or will you end up paying to exit people then paying to hire new people, having lost goodwill, trust and institutional knowledge? Loss of trust and safety within the organisation can also impact innovation; it’s hard to measure but no less real.
If there is a cost-saving, is it necessary or just desirable because you’ve set cost-saving targets which may not be rooted in what’s best for the business, e.g. investors are demanding a 10% cost reduction, competitors have announced cuts so you should too. Looking at costs and benefits over a longer cycle might give a different answer.
Businesses should also consider whether people can be retrained, rather than let go. Retraining, or training in advance of new skills needs, will become more critical with the shifts caused by AI. It requires some investment but avoids job losses, and the personal and financial costs of that, and allows retention of people who are valued members of the team.
So, in short, consider alternatives to redundancy. Redundancy is often seen as a quick fix, but it can be expensive and short-sighted. In addition to re-training, other alternatives to consider are agreeing changes to working arrangements/remuneration (temporary or permanent), pay/bonus deferral schemes, removing over-time, reducing use of agency staff/contractors. It is also important for businesses to be transparent and honest with their staff and engage in a dialogue about these alternatives.
If redundancies are necessary, even if the numbers impacted do not formally trigger legal collective consultation obligations, businesses should work with staff representatives to develop their plans, particularly if it’s a large or complex redundancy situation.( Preparation is key to communication, and communication is the key to good employee relations.
Voluntary redundancies can be worth considering where employers want to reduce the need for compulsory cuts, but they should be approached with a clear process that explains any package on offer, manages the risks of too many or unsuitable volunteers, and makes clear that expressing interest doesn’t guarantee selection.
Fair selection and consultation
It is a legal requirement to consult with affected employees in a meaningful way before final decisions are made, but in practice this is often not the case. Employers may be reluctant to consult earlier because they are worried about the destabilising impact on morale. But that can leave employees feeling that they don’t have a voice in the process and the consultation is not meaningful.
Create transparency by letting employees know redundancies may be on the table at an early stage, explaining the rationale and engaging with ways to avoid redundancies. Also, where you are going to have to construct pools/make selection decisions, discuss criteria and scoring with staff in advance to get their buy in.
Take the time to think about how to fairly and objectively assess the performance and ability of those at risk against what is required for the role being retained. This should not be presented to staff as a fait accompli, and it should not be used to pick off unwanted individuals. The direction of travel in recent Tribunal cases is an expectation of more meaningful consultation than often takes place, and it is fair to say that laws and processes were designed in a time when we thought about mental health and wellbeing differently.
Now we see a lot of individuals significantly impacted by the way selection processes are conducted. HR/management teams should make sure questions are answered swiftly and with as much clarity as possible. Often teams become overwhelmed with the volume of work generated by the process, so response times are slow and this increases anxiety. It is important to resource a redundancy project itself adequately in terms of HR and management time and expertise.
Sometimes employees feel the redundancy process is a charade because the reality is that the business and employee know that the chances of any outcome other than redundancy is very slim. It can therefore seem untransparent and perhaps less respectful to put employees through a process which is highly unlikely to change anything.
There can also be a tension between strict legal compliance and treating people with transparency and respect when consultation seems futile. We have seen examples where employers have been quite transparent about the likely outcome from the outset and this, combined with offering reasonable packages, has had a positive impact on employee engagement.
But this needs to be considered carefully and approached responsibly, ensuring that statutory consultation duties and fair‑process requirements are still properly observed. What might seem transparent to some may look and feel like pre-determination to others.
Suitable alternative roles
When an employer makes someone redundant without genuinely exploring suitable alternative roles, the dismissal is likely to be unfair. Too often, employees tell us they were simply pointed to a list of vacancies or told none existed, with employers assuming this alone meets their legal duty.
While employers aren’t required to create new jobs or exhaust every possible avenue, they must make reasonable efforts to look for alternatives. Responsible employers should also want to do this for their staff.
This should mean having a meaningful conversation with the employee about their skills and interests (and potentially what they could do with support and training); taking more proactive steps to help employees identify opportunities by coordinating across teams/departments/group companies; allowing time in the redundancy timetable for interviews; and sharing enough information about potential roles for them to make an informed choice.
Redundancy packages
If an employer has followed a compliant process, it can pay statutory redundancy pay, which is a quite limited sum, and not currently payable to anyone with under two years’ service. So, the financial terms of the package are a significant part of what an ethical package looks like, and many businesses try to enhance redundancy payments to give departing employees greater financial security.
This isn’t always affordable however, so there are other meaningful forms of support which can be considered such as offering flexible notice arrangements (including options like garden leave or payment in lieu), providing outplacement help with CVs and LinkedIn profiles, giving more detailed references, using their networks to make introductions that may help employees move more quickly into new roles, waiving post termination restrictions, retaining equipment, extending medical insurance. It is not a one size fits all, take the time to find out what support individuals need and listen to their requests.
Ultimately, ethical redundancy isn’t about procedural perfection. It’s about intention, care and the choices businesses make when the stakes are highest. How an organisation behaves in these moments becomes part of its cultural DNA, remembered long after the spreadsheets are closed and the headcount targets met.
Employers who approach redundancies with transparency, dialogue and humanity not only protect the wellbeing of those leaving, but strengthen trust among those who remain, preserve valuable institutional knowledge, and reinforce the integrity of their employer brand. Redundancy may be unavoidable at times, but the manner in which it is handled is always a choice. In short, do it with dignity.
Susie is an experienced employment lawyer at Bellevue Law advising both individuals and organisations on complex and sensitive workplace issues. She provides clear, strategic guidance across contentious and non-contentious matters, with particular expertise navigating high-stakes, emotionally charged situations involving restructures, disciplinary proceedings, whistleblowing and longstanding grievances. She also advises on contract negotiations, amicable exits and the resolution of workplace disputes.
- Susie Al-Qassab
