Redundancy and restructuring: controlling risk while preserving trust

This article is for employers interested in redundancy and restructuring. Here we give guidance on two highly specific problems: controlling legal and financial risk and protecting operational continuity and reputation.  The law sets out the framework for fair dismissals, but navigating it while leading a business through change demands much more than statutes.  It requires judgement about people, culture and process.

Two problems most employers want solved

1. Legal and financial risk control

The redundancy process is a minefield of consultation rules, timing, selection criteria and documentation.  Mistakes can undermine the savings a restructure is meant to achieve.

Employers who fail to follow statutory consultation requirements can face protective awards; flawed selection processes invite discrimination claims; and mis‑timed dismissals can lead to unfair dismissal awards that dwarf the savings made.  

In 2025 the UK labour market remained tight, but economic headwinds meant many employers were planning restructures. In this climate, a lawyer’s role is to design a defensible process and identify where risk genuinely lives – not just theoretical risk, but the practical pitfalls that lead to claims.

A defensible process starts with understanding the legal guardrails.  Collective consultation rules apply when 20 or more redundancies are proposed within a 90‑day period; employers must begin consultation at least 30 days before the first dismissal for 20–99 redundancies and 45 days for 100 or more.  Redundancy is calculated based on age, length of service (capped at 20 years) and a capped weekly wage; employees also have rights to notice pay and holiday pay.  

TUPE regulations protect employees’ terms and conditions during business transfers and render dismissals connected purely to a transfer automatically unfair unless there is an economic, technical or organisational reason .  A good employment lawyer will use these rules to structure consultations, timing and documentation in a way that withstands scrutiny from tribunals, unions or regulators.

2. Operational continuity and reputational damage

Redundancy is not just a legal exercise; it is a human and organisational shock.  Employers need to reduce headcount without detonating morale, losing key talent or damaging their employer brand.  The way a restructure is handled will quickly leak into Glassdoor, LinkedIn and industry circles.  Employees who remain can become disengaged if they see colleagues treated poorly.  A poorly managed process jeopardises productivity and may make it harder to hire when growth returns.

An experienced employment lawyer understands how decisions land on people.  They will advise on the tone and content of consultation meetings, ensuring that the business rationale is explained clearly and respectfully.  They will encourage exploring alternatives – such as voluntary redundancy, reduced hours or redeployment – as part of good governance .  They will help shape enhanced severance packages and settlement strategies when appropriate, because investing a little more can protect your reputation and reduce the risk of claims .  They will also consider the broader legal landscape, such as priority for suitable alternative vacancies for employees on maternity or shared‑parental leave, and help craft communications that balance candour with compassion.

Designing a fair and defensible process

Legal compliance is only part of risk control; fair process is equally important.  ACAS guidance recommends setting up selection pools of comparable roles and agreeing objective criteria before consultation .  Criteria might include performance, skills and qualifications, and genuine attendance records .  A scoring matrix allows these criteria to be weighted according to business priorities – for example, performance could be scored out of 15 and attendance out of 5 .  Employers must apply the criteria consistently across the pool and avoid direct or indirect discrimination.  Written evidence of scoring and decision‑making not only demonstrates fairness to employees but also provides essential defence if challenged.

Lawyers also help ensure compliance with the detail of redundancy law.  It is often the small technical errors — notice pay, holiday calculations, or eligibility thresholds — that turn an otherwise fair process into a dispute.  They will check that statutory notice pay and holiday pay are properly accounted for .  For transfers, they will advise when TUPE applies and whether dismissals can be justified by an ETO reason .  Getting these details right prevents small errors from turning into expensive disputes.

Balancing cost and trust: the human side

A defensible process does not have to be adversarial.  Employers who communicate early, explain the business reasons for change and listen to feedback are more likely to maintain trust.  One‑to‑one meetings, clear answers to questions and reasonable time off to look for work or training can make a difficult experience less distressing.  

Where budgets allow, enhanced redundancy packages or outplacement support can soften the blow and signal that people matter.  For those who remain, transparent communication about the organisation’s future helps rebuild morale and retain talent.

Conclusion: why you hire an employment lawyer

Employers contemplating redundancies or restructures are paying for problem‑solving, not lectures on law.  The best employment lawyers quietly earn their keep by balancing cost savings against the risk of litigation and the need to preserve organisational trust.  They design processes that stand up to scrutiny, steer you through consultations with confidence and help you navigate the human impact with dignity.  In a cooling labour market where redundancies are rising, that blend of legal rigour and pragmatic judgement is what protects your business – both financially and reputationally.

Visit our restructuring & redundancy service page to see how we work, or contact us if you want to talk.

Antonia Brewer