No organisation approaches redundancy lightly, however, acting to avoid common pitfalls not only makes the process clearer for both employers and employees but also reduces the risk of costly unfair dismissal claims.

This will be even more important from January 2027 when, under the Employment Rights Act 2025, the qualifying length of service needed for employees to bring claims for unfair dismissal will reduce to six months (from two years) and the cap on compensation for unfair dismissal will be removed.

Whether redundancies are voluntary or compulsory, here are ten potential pitfalls to avoid.

1. Getting the timing wrong

Employees should be consulted as early in the process as possible when they can still influence the outcome. It must be genuine and cover all aspects of the process, including ways that avoid or reduce redundancies, the pool for selection and the selection criteria.

Charlotte Gunn, Associate at Stevens & Bolton, explains: “Where 20 or more dismissals are proposed within 90 days, collective consultation obligations will usually be triggered (with changes expected in 2027).

“Employers must consult appropriate employee representatives for at least 30 days (or 45 days for 100 or more redundancies) before dismissals take effect. Failure to comply can result in protective awards of up to 180 days’ pay per employee.”

2. Not consulting with employees who are absent

Employers need to be aware of the need to consult with employees on long-term absence, including those on maternity or sick leave.

“Special rules apply to these employees and failure to consult properly can lead to discrimination as well as unfair dismissal claims,” says Annie Gray, Partner at Schofield Sweeney. “Where collective redundancies are proposed, a failure to notify the Secretary of State is a criminal offence potentially resulting in unlimited fines.”

Gray says there should also be considerations for any employees who are pregnant or have returned from family-related leave as special rules apply to them on redundancy. She says: “Redundant employees with at least two years continuous service will be entitled to a statutory redundancy payment in addition to notice.”

3. Getting selection wrong

In both voluntary and compulsory processes, the selection criteria should be objective, measurable, capable of independent verification and free from discrimination, with weightings that can be justified.

“Employers will have to be able to justify their decisions as objectively fair, to reduce the possibilities of them being deemed unfair,” Gray says. “This means using objective, rather than subjective, criteria. Equally the selection criteria must also not be inadvertently discriminatory to avoid the risk of discrimination complaints. Caution should therefore be taken with using things like absence records as a scoring criteria.”

In wishing to retain its best talent, an employer may take steps that suggest who it proposes to retain and to dismiss are predetermined. “However, this causes significant risk of any unfair dismissal claim being successful, which will be even more costly moving forward when the compensation caps for unfair dismissal are lifted,” says Lisa Patmore, Partner at Dorsey & Whitney.

4. Not considering alternative vacancies

The duty to help find suitable alternative employment is an active one, so it is important that employees have ongoing access to a list of internal vacancies, including across all group companies, Gunn says.

“Employers should actively work with at-risk employees to identify any roles that may be suitable throughout the redundancy process up to,  and including, the date their employment ends,” she explains.

This requires the employer to take proactive steps to assist the employee rather than simply informing them of open vacancies on a website. Gray adds: “It is also vital that consultation starts at a formative stage when proposals are still capable of being influenced and the employer still has an open mind and before key decisions are made.”

5. Treating redundancy as a “tick-box” exercise

Employers should go into consultation with an open mind, being genuinely receptive to change, rather than treating redundancy decisions as a foregone conclusion with a pre-determined outcome.

However long-standing or cordial relationships may be, there is no substitute for following a proper process, according to Patmore. “That said, what makes an employee less likely to make a legal claim is the feeling that, whatever the outcome, they have been treated fairly,” she says. “Empathy, understanding and willingness to listen, therefore, are also very important.”

Appeals are an important step in the process, and not giving a meaningful right of appeal can make the process unfair. Gunn says: “Any points raised by the employee during their appeal should be given careful and genuine consideration before a final decision is made.”

6. New triggers for collective redundancy

The Employment Rights Act 2025 increased penalties for employers who fail to properly consult on proposed mass redundancies from 90 to 180 days’ pay per employee as of April 2026. Furthermore, failure to comply with collective consultation can, in some cases, increase the chances of individual dismissals being unfair.

“Understanding when the collective consultation duty is triggered, particularly where redundancies are staggered or involve changes to terms and conditions that fall within the wide definition of redundancy, can be tricky,” Gray warns.

In addition, the requirement to elect employee representatives where there is collective consultation but no recognised union, can be complicated for employers.

7. Procedural issues

“Procedural unfairness prior to making redundancies can render a dismissal unfair, even if the role in question will cease to exist,” Patmore says. This includes making sure that any selection criteria are objective and capable of independent verification, rather than based on personal opinion.

“It’s always sensible to prepare template letters and scripts to support the process, however populating them with specific names and details too early can quickly get employers into hot water,” explains Patmore. “It risks creating the impression that the decision to dismiss has already been made, and that the consultation was, therefore empty and meaningless.

8. Not planning ahead

Detailed planning before commencing any redundancy process is vital – from establishing the business case, to determining numbers and timescales, and identifying appropriate selection pools and criteria.

Gray urges employers to start consultation while proposals are still at a formative stage, with adequate information provided to the employee(s), adequate time for response, and conscientious consideration of responses.

“It is also really important to document everything at every stage to ensure you have evidence of compliance and can assist justification to a tribunal if required,” she says.

“Offering employees the right to appeal redundancy decisions is also good practice – and essential in most cases – and can help businesses remedy any earlier mistakes in the procedure.”

9. Managing site-specific redundancies independently

The Employment Rights Act 2025 introduced a new, broader trigger for collective consultation obligations. Employers must now consider redundancy proposals not just at a single establishment, but across their entire organisation.

While the aggregate threshold is subject to further government regulation, the legislative intent is clear that small-scale restructures across multiple sites that previously fell under the radar will now probably trigger mandatory collective consultation.

Jeremy Berg, Partner at Spencer West, says HR oversight is essential to track total headcount reductions across the organisation, ensuring that you do not accidentally breach collective consultation thresholds.

10. Claims from relatively short service employees

From 1 January 2027, the period required to claim unfair dismissal will reduce from two years to six months, and the current statutory cap on compensatory awards for unfair dismissal will be removed.

“Many businesses have historically used this time to bypass rigorous performance management, but they must now implement robust, documented probationary reviews and performance management frameworks immediately; otherwise, they will face an influx of claims from relatively short-service employees,” warns Berg.