Redundancy Process for Small Businesses: A South Yorkshire Employer's Guide

Redundancy is one of those processes where good intentions aren't enough. You can be making the decision for entirely legitimate business reasons and still get the mechanics wrong in a way that ends up costing more than the saving was worth.

Genuine redundancy, not disguised performance management

First principle, and the one that trips up more businesses than any other. Redundancy is about the role, not the person. If the real issue is that someone isn't performing, that's a performance process, not redundancy, and dressing it up as the latter is one of the fastest routes to an unfair dismissal claim.

Selection has to survive scrutiny

Where more than one person could be at risk within a role, there needs to be a fair, objective selection process. Skills, experience, disciplinary record, attendance, applied consistently and documented. "Gut feel" doesn't hold up, however confident the gut feel is.

Consultation isn't optional, and it isn't quick

For fewer than 20 redundancies there's no fixed statutory minimum period, but consultation still has to be meaningful, not a formality before a decision already made. For 20 or more at one establishment within 90 days, the statutory minimum consultation periods apply, and getting the threshold wrong is a common and expensive mistake.

What's changed and matters right now

The protective award for failing to properly inform and consult in a collective redundancy doubled to a maximum of 180 days' pay per affected employee, effective from 6 April 2026the protective award for failure to inform and consult will double to 180 days' pay on 6 April. That's not a technical detail. It roughly doubles the financial exposure of getting the collective consultation process wrong, which changes the calculation for any South Yorkshire employer weighing up whether to run a tight timeline or take the extra week to get it right. DLA Piper

Redeployment, not just paperwork

There's a genuine obligation to look for suitable alternative employment within the business before dismissal, and it needs to be a real search, not a token email to line managers. Employees are entitled to trial periods in alternative roles too, and getting that wrong (ending the trial too early, or not offering it at all when a suitable role existed) is another common source of claims.

The practical reality for smaller businesses

Most South Yorkshire SMEs running a redundancy aren't dealing with the 20-plus collective threshold. They're dealing with one or two roles, real financial pressure, and a genuine desire to do right by people who've been loyal. The process still needs the same rigour, just scaled appropriately. Getting it wrong doesn't just risk a claim, it damages the business's reputation with the people who stay.

If you're facing this and want a second opinion on the process before you start, that conversation is worth having early, not once letters have already gone out.