Most small business owners making someone redundant for the first time do not know what to do first. This guide covers the individual redundancy process for a single employee, step by step. It is based on ACAS guidance and written in plain English.
It is not legal advice. For complex situations, speak to an employment solicitor. If your situation involves more than one employee, union involvement, potential discrimination or pregnancy, different rules apply and this guide is not the right resource.
Who this applies to. Redundancy only applies to employees. Agency workers, casual workers and those on zero-hours contracts are generally not employees and different rules apply. If you are unsure of someone's employment status, check before proceeding.
Before you start
Redundancy is a specific type of dismissal. It applies when a role is no longer needed, not when an employer wants to remove a specific person. If the real reason relates to performance or conduct, redundancy is the wrong process and a disciplinary procedure should be followed instead.
Before starting a redundancy process, ACAS recommends considering alternatives. These include offering voluntary redundancy, reducing hours, stopping overtime, freezing new hires or redeploying the employee into another role. If no alternatives are viable, the redundancy process can begin.
Important. Using a redundancy process to remove someone for performance or personal reasons is one of the most common causes of unfair dismissal claims. Make sure the reason is genuinely about the role, not the person.
The redundancy process step by step
Confirm the reason is genuine
The role must genuinely be no longer needed. Common valid reasons include the business closing, restructuring that removes the need for the role, financial pressure requiring a reduction in headcount, or a change in the type of work needed.
Document your reason clearly before you do anything else. You should be able to explain it simply and factually.
Check if a selection process is needed
In most single employee redundancies, no selection process is needed. If this person is the only one doing this role and the role is being removed entirely, you can proceed directly to notification.
If there are two or more people doing the same or similar work and you are only making one of them redundant, you do need a fair selection process. Selection criteria must be objective and measurable. They must not be based on protected characteristics such as age, sex, race or disability.
For the typical small business owner making one person redundant because the role no longer exists, this step is straightforward. Document that the role is being removed and move on.
Notify the employee in writing
The employee must be told in writing that their role is at risk of redundancy. This is the at-risk letter. It should explain the reason, confirm that no decision has been made yet and invite them to a first consultation meeting.
This letter should be sent before the formal consultation meeting begins. It puts the process on a proper footing and creates a written record.
Hold a genuine consultation
Consultation must happen before any decision is made. ACAS is clear that consultation must be genuine and meaningful. This means listening to the employee, considering their suggestions and being open to alternatives.
You must hold at least one private meeting with the employee. They have the right to be accompanied by a colleague or trade union representative. The meeting should discuss the reason for the redundancy, whether alternatives exist and any concerns the employee has.
There is no minimum consultation period for individual redundancies, but you should allow enough time for a real conversation. Rushing through consultation is one of the most common process failures.
Consider suitable alternative employment
Before confirming redundancy, you should check whether any other suitable role exists in your business. If one does, you should offer it to the employee. Failing to do so could be challenged as unfair dismissal.
If no alternatives exist, make a note of this for your records.
Confirm the outcome in writing
Once consultation is complete and a decision has been made, the employee must be told in writing. The outcome letter should confirm the redundancy decision, their last working day, their notice period, how much redundancy pay they will receive and how it has been calculated, and their right to appeal.
Give proper notice
The minimum statutory notice periods are one week for employees with one month to two years of service, one week per complete year for those with two to twelve years of service, and twelve weeks for those with twelve or more years of service.
Always check the employment contract as it may require a longer notice period. You cannot give less than the statutory minimum.
Calculate and pay redundancy pay
Statutory redundancy pay applies to employees with two or more years of continuous service. It is calculated based on age, years of service and weekly gross pay, capped at £751 per week.
Employees aged under 22 receive half a week's pay per year of service. Those aged 22 to 40 receive one week's pay per year. Those aged 41 and over receive one and a half weeks' pay per year. Service is capped at 20 years.
Employees with less than two years of service are not entitled to statutory redundancy pay, but a fair process must still be followed.
Offer the right to appeal
The employee should be given the opportunity to appeal the redundancy decision. ACAS suggests allowing around five working days from the outcome letter to raise an appeal. The appeal should be heard by someone not involved in the original decision where possible.
Common mistakes to avoid
The most common reasons redundancy processes go wrong are using redundancy for the wrong reason, not consulting genuinely before a decision is made, failing to consider alternative roles, getting the notice period or pay calculation wrong, and not giving the employee the right to appeal.
Each of these can result in an unfair dismissal claim even if the underlying business reason for the redundancy was sound.
Frequently asked questions
Yes. While employees with less than two years of service cannot generally claim unfair dismissal, a fair process still matters. Day one rights introduced in April 2026 have strengthened some protections. Always follow the process regardless of service length.
No. ACAS strongly recommends at least one private consultation meeting before a decision is made. Skipping this step is one of the most common causes of successful unfair dismissal claims.
Redundancy is a specific type of dismissal where the role itself is no longer needed. If the reason relates to the individual's conduct or performance, that is a different process entirely and a disciplinary procedure should be followed.
There is no set minimum for individual redundancies. In practice a straightforward process typically takes two to four weeks from the at-risk letter to the final day, depending on the notice period. Rushing the process increases the risk of a successful challenge.
Not necessarily. For a straightforward single employee redundancy with a clear business reason, a structured guide and the right documents are often enough. For complex situations involving disputes, protected characteristics or multiple employees, professional advice is worth the cost.
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