Managing staff redundancies: step by step

Step 1: Check if redundancies are necessary

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Redundancy is usually a type of dismissal when a role is no longer needed. You should only consider making redundancies if part or all of the organisation is:

  • closing, or has already closed
  • changing the types or number of roles needed to do certain work
  • changing location

If you have concerns about an employee’s conduct or performance, you need to follow a disciplinary or capability procedure.

When considering making redundancies, your first step should be to check:

  • why you think redundancies are necessary
  • what issues you’re trying to solve
  • other options that might be available

Avoid redundancies during coronavirus

If the coronavirus (COVID-19) pandemic has affected the work your organisation does, instead of making redundancies you could put staff on temporary leave ('furlough').

Furlough is where an employee or worker agrees with their employer to stop work temporarily but stay employed. Furlough must be agreed in writing.

You can claim financial support from HMRC for up to 80% or £2,500 of furloughed employees' or workers' wages, whichever is lower.

Find out more about:

Look at other options

Before starting a redundancy process, you should consider all options to reduce or even avoid redundancies.

For example, you could see if you can:

  • offer voluntary redundancy
  • change working hours
  • move employees into other roles
  • let go of temporary or contract workers
  • limit or stop overtime
  • not hire any new employees

Offer voluntary redundancy

You can give employees the option to put themselves forward for voluntary redundancy.

It's your decision whether or not to accept the volunteers, taking into account the wider needs of the organisation. It’s a good idea to make this clear to employees early on.

Avoid discrimination

If you do give the option of voluntary redundancy, you:

  • should offer it as widely as possible, not necessarily just to those at risk of redundancy
  • should not pressure or single anyone out
  • must select employees in a fair way

This can avoid the risk of indirect discrimination. For example, it could be age discrimination if you only select older employees.

Change working hours

There could be ways for you to save costs by having staff work more flexibly.

You should always talk with employees and try to reach agreement first.

For example, you could offer employees:

  • homeworking
  • job shares
  • to work fewer hours

If it's written in their employment contracts, you can tell employees that they need to:

  • stop working for a while (known as a 'temporary lay-off')
  • work fewer hours (known as 'short-time' working)

Lay-offs and short-time working are temporary solutions and must not be a permanent change to agreed working hours.

Find out more about lay-offs and short-time working.

If you're changing what's written in employment contracts

You usually need to agree changes to employment contracts with employees.

You can talk with them to try to agree. They do not have to accept.

You should be careful if changing a contract of employment when there's been a TUPE transfer.

Find out more about changing an employment contract.

Move employees into other parts of the organisation

You should see if you can move employees into different areas of your organisation ('redeploy') to avoid redundancies. For example, by looking at:

  • what transferable skills staff have
  • if there other vacant or new roles in the organisation that require those skills
Manage staff redundancies
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Please do not include any personal information, for example email address or phone number. Unfortunately we cannot respond to individual requests for information. If you need help, call our helpline on 0300 123 1190