Redundancy Guide: More than two years’ service

1. Why might redundancy happen?

Redundancy happens when your employer decides that your role is no longer needed. This can happen for a range of business reasons, such as:

• Your role or service is no longer needed
• Your employer needs to cut costs
• The business is closing or relocating
• The workforce is being reduced

Redundancy is always a last resort, used when other options (like reassigning roles or reducing costs elsewhere) aren’t enough.

2. What’s a fair redundancy process?

A fair redundancy process starts with identifying which roles are at risk. Then, if more than one person holds that role, employers should use clear and objective criteria to decide who is made redundant. It’s not about picking individuals, it’s about business needs.

A fair redundancy process usually includes:

• Consultation – discussions between you and your employer about what’s happening
• The consultation period – the time allowed, depending on how many people are affected
• Employee representatives – people who might speak on behalf of staff (if it’s a collective consultation)
• Pooling and scoring – how decisions are made if multiple people share the same role

3. The consultation process- what is it?

The consultation is a chance for you and your employer to talk through what’s happening. They’ll explain the reasons for redundancy and look at alternatives – like offering other roles. If redundancy can’t be avoided, you’ll be given notice at the end of the process.

Consultations can happen one-on-one, with a trade union representative, or with an employee representative (if more than 20 people are affected). If your employer doesn’t consult with you properly, your redundancy could be considered unfair.

What to expect from the first consultation meeting?

This first meeting is about sharing information and giving you a chance to ask questions. It isn’t about making final decisions.

You can expect to cover:

1. Why redundancies are being considered
2. Whether alternatives have been explored
3. Why your role is at risk
4. How you were selected (if others are in the same role)
5. Any alternative roles available
6. What happens next

Things to keep in mind:

• You can ask any questions at any point.
• You don’t have to make decisions on the spot. If you need more time, ask for it.
• Taking notes can help you remember details.
• It is best practice for employers to allow  a trade union representative or a colleague to accompany you. Their role is to take notes, support you and they can speak on your behalf if that’s helpful. They can’t answer questions on your behalf.

Think of this first meeting as a fact-finding conversation. It’s a way to understand what is happening and explore the options.  The aim is for there to be a genuine, two-way conversation and not to reach a final decision.

How long does the consultation process last?

• Fewer than 20 redundancies: No legal minimum, but usually 1–2 weeks
• 20–99 redundancies: At least 30 days
• 100+ redundancies: At least 45 days

During this time, you stay on the payroll and keep your usual benefits.

What’s the role of employee representatives?

If 20 or more people are at risk, your employer may appoint employee representatives.

They will:

• Act as a collective voice for employees
• Raise questions and share concerns on behalf of the group
• Help ensure everyone’s views are heard

This process is called collective consultation and it should include everyone affected, no matter how long you’ve worked for the organisation or whether you’re on a permanent or fixed-term contract.

Alongside it, you’ll also have your own one-to-one consultation. These individual meetings often follow the group discussions, but they can also happen at the same time.

4. How are redundancies decided?

If your role is at risk but others in the same role are staying, your employer must use fair and objective criteria to decide who goes.

They should explain:

• Who is in the selection pool (others with the same or similar role)
• What criteria are being used

Common criteria include:

• Skills, qualifications, and ability
• Work performance
• Attendance (excluding disability-related absence or parental leave)

Criteria can be weighted differently, but the process must always be fair, transparent, and free from discrimination.

Your employer should share your own score with you, but not other employees’ scores. If you feel the process isn’t fair, you have the right to challenge it.

5. What will I be paid if I’m made redundant?

If you’ve worked for your employer for two years or more, you’re entitled to redundancy pay. This usually includes:

• Statutory redundancy pay (or more, if your contract offers it)
• Notice pay – either worked, or paid in a lump sum
• Holiday pay – for any untaken leave

Some employers may also offer extra (“ex gratia”) payments which may be tied to signing a Settlement Agreement.

Tax:

• Statutory redundancy pay and ex-gratia payments combined are tax-free up to £30,000
• Notice pay and holiday pay are taxed as normal income

How statutory redundancy pay is calculated:

• Under 22: 0.5 week’s pay per full year worked
• 22–41: 1 week’s pay per full year worked
• 41+: 1.5 weeks’ pay per full year worked

This is capped at 20 years of service, with a maximum statutory payout of £21,570. Weekly pay is capped at £719.

Notice period options:

• Pay in Lieu of Notice (PILON): A lump sum instead of working your notice (check your contract if there is a clause about this).
• Work your notice: Continue working and remain on payroll.
• Garden leave: Stay on payroll but don’t work, often for business reasons.

6. What counts as unfair redundancy?

Your employer must have a valid business reason, such as reduced demand, restructuring, or closure. Redundancy is unfair if you are selected for certain reasons, such as:

• Pregnancy or maternity leave
• Trade union membership
• Whistleblowing
• Raising health and safety concerns

(This isn’t an exhaustive list.)

A fair process also means:

• Explaining why your role is at risk
• Considering alternatives
• Using fair and transparent selection criteria

Your employer should set out the process clearly in writing, and also explain it to you directly so you know what to expect.

Discrimination

You’re protected under the Equality Act 2010, which means redundancy decisions cannot be based on any of these nine protected characteristics:

1. Age
2. Disability
3. Gender reassignment
4. Marriage or civil partnership
5. Pregnancy or maternity leave
6. Race, ethnicity, or country of birth
7. Religion or belief
8. Sex
9. Sexual orientation

For example, if your employer selects you for redundancy because you have a flexible working agreement due to a disability, this could be considered discrimination. While having a protected characteristic doesn’t make redundancy impossible, it cannot be the reason for it.

Victimisation

If you’ve previously raised concerns about discrimination, such as reporting sexual harassment, your employer cannot select you for redundancy because of that. As mentioned, raising a concern doesn’t make redundancy impossible; it just can’t be the reason for it.

Settlement agreements

Sometimes, employers offer a settlement agreement. This is a legally binding contract that prevents you from taking legal action against them, usually in exchange for financial compensation or other terms.

You must get the agreement reviewed by a solicitor who is independent of your employer. Employers often cover the cost of this review, but they don’t have to pay for further legal advice.

If you feel the process hasn’t been fair, you can ask your employer to explain their decision-making and appeal options. NABS can also guide you through these conversations and share details of independent solicitors if you need them.

7. Can I be offered a new role?

Your employer may try to avoid redundancy by offering you a suitable alternative role.

A role is considered suitable if:

1. Responsibilities are similar
2. Pay, benefits, and terms are the same (or comparable)
3. You have the right skills and experience
4. Hours and location don’t change significantly

Will I be entitled to a trial period if I start a new role?

You’re entitled to a four-week trial in a new role. This can be extended for training, but only if agreed in writing.

If you accept the role, confirm this in writing and request an updated contract.

Refusing a role

• Reasonable refusal: If the role isn’t a good fit (for example, lower pay or status), you still keep your right to redundancy pay.
• Unreasonable refusal: If you reject a role that is suitable and appropriate without a valid reason, you could lose redundancy pay.

8. What if voluntary redundancy is offered?

Sometimes, employers offer voluntary redundancy, often with financial incentives.

Before deciding whether to accept, ask for:

• A full breakdown of your redundancy entitlement
• The details of any additional payments offered
• Information about state benefits you may be eligible for
• Whether your income or mortgage protection covers voluntary redundancy.

Volunteering doesn’t guarantee you’ll be selected, but if you are, the process must still be fair.

9. Redundancy While Pregnant or on Maternity Leave, Adoption Leave or Shared Parental Leave (SPL)

Being pregnant or on maternity leave doesn’t protect you from redundancy completely, but it does give you important rights and protections.

The consultation process

If you’re pregnant or on maternity leave, your employer must still consult with you about any proposed redundancies that could affect your role. They should give you as much notice as possible.

Your redundancy must be genuine, and the process must be fair. During consultation, you can expect discussions to cover:

• The reasons for the proposed redundancy and which roles are affected
• Possible alternatives, such as voluntary redundancy or reduced hours
• The selection criteria used, and how any scoring was carried out (if you’re in a “pool” of employees at risk)

Pregnancy or maternity leave should never be the reason you’re chosen for redundancy. If you believe it is, you may want to explore your rights under unfair dismissal or discrimination law.

Priority for suitable alternative roles

If you’re pregnant, on maternity leave, adoption leave, or shared parental leave and your employer identifies a suitable alternative role for you, then you have the right to be offered it before other employees at risk. You don’t need to apply.

The role must be:

• Appropriate for you, based on your skills and experience.
• No worse than your previous role in terms of pay, location, conditions, and status

This protection applies as follows:

• From when you notify your employer of your pregnancy and continues for 18 months after the expected week of birth or actual birth date. This also applies to stillbirths after the 24^th week of pregnancy or neonatal deaths at any stage of pregnancy.
• Miscarriages before the end of the 24^th week of pregnancy are protected from when you notify your employer of your pregnancy, up to 2 weeks after the miscarriage.
• From the date adoption leave starts and for 18 months after the adoption placement or, if adopting from overseas, after your child arrives in the UK.
• The protection begins on the first day of SPL if you have not taken maternity or adoption leave. In this instance, if you take six or more consecutive weeks of SPL, the protection continues for 18 months after the expected week of birth, actual birth date or adoption placement (or after your child arrives in the UK); if you take less than six weeks of SPL, the protection will end on the date the leave ends.

Maternity pay and Redundancy

If you qualify for Statutory Maternity Pay (SMP), you will still receive it, even if you’re made redundant. You qualify if you:

• Earn on average at least £125 a week.
• Have worked for your employer for at least 26 weeks up to the end of the 15th week before your expected week of birth.
• Have provided proof of pregnancy by the 15^th week before your due date and given at least 28 days’ notice of when you want your pay to start, along with submitting your MATB1 form

If you’re made redundant before your qualifying week, you may need to claim Maternity Allowance instead.

If you’re on maternity leave when redundancy happens, you’ll continue receiving SMP for the full 39 weeks. If you were receiving enhanced maternity pay, it usually stops when you’re made redundant.

These maternity payments would be in addition to your notice pay and untaken accrued holiday.

Get free, confidential help via our advice line:

If you’re struggling with redundancy or change, our friendly Advice Line team are just a phone call away.

They’ll be your sounding board, your cheerleader and someone to talk through your issues with. Whatever your role or level, our experts will give you free, confidential guidance and support.

Can’t find your way forward? Let’s chat. Call us on 0800 707 6607 from 9am – 5.30pm, Monday to Friday or email us at support@nabs.org.uk.

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