Profile information Account settings
Sign up Log in

MAKE YOUR FREE Redundancy policy

  • Make your document in minutes
  • Access from any device
  • Securely sign online
Make document

How to make a Redundancy policy

This document is GDPR compliant.

Inform your employees of your redundancy process using this policy. This redundancy policy explains to employees how redundancy decisions are to be made and summarises their statutory rights. A redundancy policy assures employees that the employer will maintain good communication and consultation during the redundancy process. Employers should follow this procedure to help them make lawful redundancies.

Use this redundancy policy:

  • to help managers communicate clearly with all employees affected by a proposed redundancy exercise and ensure that those employees are treated fairly, reasonably and without discrimination throughout the process
  • as a guide of ways to avoid compulsory redundancies
  • to remind managers of consultation obligations during the redundancy process
  • only for employees based in England, Wales or Scotland

This redundancy policy covers:

  • the purpose of the redundancy policy
  • consultation obligations and how they will be dealt with
  • explanation of the selection criteria and process
  • redeployment
  • dismissal by reason of redundancy

A redundancy policy is a document that sets out the procedure to follow within a business when making staff redundant. It details each step of the redundancy process and outlines the statutory entitlements for redundant staff.

Whether you are running a small or large business, the redundancy process needs to be dealt with fairly and consistently. A carefully written redundancy policy ensures staff are aware of their rights when being made redundant, and avoids risks of unfair dismissal claims further down the line. It shows management is concerned about employees' welfare and employment security.

A redundancy policy should only apply to employees who are under an employment contract. This means it does not apply to contractors or workers.

The redundancy policy lays out the steps of the redundancy process, including:

  • Considering alternative employment solutions - managers should always consider alternative options to reduce or prevent redundancies, such as part-time or flexible working.
  • Staff selection - the redundant staff must be selected carefully and fairly, through a redundancy pooling and selection process.
  • Staff information - all potentially affected staff must be informed that they are at risk of redundancy.
  • Employee consultation - each employee who is at risk of redundancy should be invited to a consultation meeting, where potential redundancy, as well as alternative employment options, will be discussed.
  • Redundancy notice - once the selection and consultation processes are complete, it is important to inform staff in writing that they are being made redundant, with a Dismissal for redundancy letter.
  • Appeal - employees should have the possibility to appeal their selection for redundancy.

The redundancy policy sets out the rights redundant staff are entitled to, which include:

  • statutory pay according to their pay, age and length of service, and
  • time-off to look for work or make arrangements for training.

This redundancy policy is adapted to both small or large businesses, as long as less than 20 employees are likely to be made redundant. However, in small and micro businesses, redundancy pooling and selection might not be relevant, as employees often perform their roles individually so there is no element of selection among employees performing similar roles. For further information on small-scale redundancies, read How to make someone redundant in a small business.

Ask a lawyer for:

  • employees based outside England, Wales or Scotland
  • a redundancy exercise where 20 or more employees are likely to be made redundant within a 90 day period
  • where trade union consultation is required due to collective agreements affecting the employee's contracts of employment

Other names for Redundancy policy

Redundancy procedure, Redundancy process.