Making one or two roles redundant in a small business

Trade has slipped for two quarters, or a contract has not been renewed, and the payroll no longer adds up. In a business of twenty or thirty people that means one or two jobs, not twenty.

The number matters more than it looks. The published guidance divides at 20. GOV.UK says that "there are no set rules to follow if there are fewer than 20 redundancies planned, but it's good practice to fully consult employees and their representatives". Read quickly, that sounds like permission to skip the process. The same page says that if you do not consult, "any redundancies you make will almost certainly be unfair and you could be taken to an employment tribunal". GOV.UK on redundancy consultations.

As checked on 5 October 2026, the protection that makes the process matter is about to reach further. Regulations made on 26 May 2026 bring the six-month unfair dismissal qualifying period into force on 1 January 2027 and remove the cap on the compensatory award. They apply where the effective date of termination falls on or after that date, even where the employee was dismissed before it. Commencement regulations, SI 2026/559. The government's timetable lists the same date and states that all future dates remain subject to parliamentary processes and may change. Government implementation timetable. The wider list of dates is on our Employment Rights Act key dates page.

Check that it is a redundancy, not a reorganisation

GOV.UK puts the test in one sentence: "Redundancy is when you dismiss an employee because you no longer need anyone to do their job." For it to be genuine, you must show that the job will no longer exist. GOV.UK on making staff redundant.

The statute behind that wording is section 139 of the Employment Rights Act 1996. A dismissal is by reason of redundancy if it is wholly or mainly attributable to the employer having ceased, or intending to cease, to carry on the business, either altogether or in the place where the employee worked, or to the requirements of the business for employees to carry out work of a particular kind having ceased or diminished, or being expected to, in the business or in that place. Employment Rights Act 1996, section 139.

The test is how many employees the work needs, not whether the work itself has gone. A business that needs four people where it needed five is in a redundancy situation even though the work continues, because the requirement for employees to carry out work of that kind has diminished. Acas puts the same point as changing "the types or number of roles needed to do certain work". Acas on managing a redundancy process. What does not work is moving the work to someone whose job is unchanged and calling the vacated title redundant while the business still needs the same number of people on it. Section 139(6) runs the other way as well: "cease" and "diminish" mean cease and diminish "either permanently or temporarily and for whatever reason", so a downturn you expect to be short-lived can still support a redundancy. Where the role ends because a fixed-term contract has reached its end date, the same test decides whether the reason is redundancy or some other substantial reason, and our guide to what to do before a fixed-term contract ends works through which way the facts point.

A genuine redundancy is not by itself a fair dismissal. Redundancy is one of the potentially fair reasons under section 98, and the tribunal asks separately whether, in the circumstances, including the size and administrative resources of the employer's undertaking, which is the statute's word for the business as a whole, the employer acted reasonably in treating it as a sufficient reason for dismissing that person. Employment Rights Act 1996, section 98. The size of the business is part of that test, so a 25-person firm is not judged as though it had an HR department, and is not excused the process either.

Write the business case down before you decide anything. Acas asks you at step one to check why redundancies are necessary, what issue you are trying to solve and what other options exist, and at step two to make a redundancy plan you share with employees, covering the options considered, the numbers, the timeframes, the selection criteria, the notice and redundancy pay, and the appeal. Acas on managing a redundancy process, Acas on following the right process. Your own note of the figures or the operational change behind it is what explains the decision months later.

Decide who is in the pool, and write down why

The pool is the group the selection is made from, so where one of five identical roles is going, the pool is those five. Acas says each pool should include all roles that are the same or similar, and could also include roles needing similar skills. Acas on selecting employees for redundancy.

Can a whole section be left out of the pool? Yes, where the work of that section is what is going: Acas notes that if you are proposing to make a whole team redundant, you will already have a list of roles. Excluding a team because its work is ending is a pool decision; excluding a team whose members do the same job as the people at risk is not.

A pool of one is judged under the section 98(4) reasonableness test, and section 105 of the Employment Rights Act 1996 shows where it becomes automatically unfair. A redundancy dismissal is automatically unfair where the circumstances applied equally to other employees in the same undertaking holding similar positions who were not dismissed, and the person was selected for one of a list of prohibited reasons, including whistleblowing and asserting a statutory right. Employment Rights Act 1996, section 105. Putting one person in a pool alone when two others do substantially the same job invites the question of why the comparison was never made.

GOV.UK lists criteria that can be used: skills, qualifications and aptitude, standard of work or performance, attendance, and disciplinary record. GOV.UK allows length of service, "last in, first out", only where you can justify it, and says selecting on length of service alone is likely to be age discrimination. The grounds that make a selection unfair whatever else is in the scoring are on the same page: pregnancy and all reasons relating to maternity, family leave including parental, paternity and adoption leave, acting as an employee representative or a trade union representative, joining or not joining a trade union, part-time or fixed-term status, any of the protected characteristics, and pay and working hours, including the Working Time Regulations. GOV.UK on compulsory redundancy. Acas adds that criteria should be as objective and measurable as possible, that an attendance record used as a criterion must leave out absences relating to disability, pregnancy or maternity, and that you should have written evidence against each criterion.

Three criteria you can point to a document for are worth more than six scored from memory. Record the scores on the day, with the evidence beside each.

Consult before the decision, even for one person

There is no statutory consultation procedure below 20 redundancies, and Acas states that there are no rules in legislation for how long individual consultation should last. Acas on redundancy consultations. The reasonableness test in section 98(4) still expects a process, and Acas sets out what it looks like.

Tell people as soon as possible that you are considering redundancies. Acas suggests a meeting with everyone affected, not only those at risk, covering the risk and the reason for it, how many redundancies you are considering and what happens next. Those at risk should then have it in writing: that they are at risk, what other options exist such as voluntary redundancy or redeployment, and the outline of the consultation. Acas on telling employees.

Then consult before the decision, not after it. Acas says you should meet each affected employee in private at least once, should consider allowing them to be accompanied, and should discuss the changes needed and why, ways to avoid or reduce the redundancies, the selection criteria and any concerns raised. Consultation has to be meaningful: you should be able to show you considered what each person said.

For one or two roles that is two or three short meetings over a fortnight, each with a dated note sent to the employee afterwards. A consultation with no written trace is hard to evidence later.

Collective consultation is a different regime and it starts at 20: 20 or more employees proposed for redundancy at one establishment within 90 days or less, with consultation beginning at least 30 days before the first dismissal, or 45 days where 100 or more are proposed. Trade Union and Labour Relations (Consolidation) Act 1992, section 188. Acas confirms that voluntary redundancies and redeployments count towards the number. Acas on collective consultation. The duty to notify the Redundancy Payments Service on form HR1 runs on the same deadlines, and GOV.UK warns that "you can be fined an unlimited amount if you do not notify RPS". GOV.UK on redundancy consultations. Both start at 20, so neither reaches one or two roles.

Work out notice, pay and the alternative job

Notice comes after the decision. Acas is direct about the order: "You can only give notice once you've finished the consultation and selection process." Acas on giving notice.

Statutory minimum notice under section 86 of the Employment Rights Act 1996 applies once someone has been continuously employed for a month or more. It is a week where continuous employment is less than two years, a week for each full year where it is two years or more but under twelve, and twelve weeks at twelve years or more. The contract may give longer; it cannot give less. Employment Rights Act 1996, section 86. Acas lists what the notice letter should contain: the score against each criterion and why, the notice period and leaving date, the redundancy pay and how it was worked out, any other pay due, and how to appeal.

Statutory redundancy pay needs two years' continuous service. It is half a week's pay for each full year up to the employee's 22nd birthday, a week's pay for each full year after the 22nd and 1.5 weeks' pay for each full year after the 41st, counted back from the dismissal date over a maximum of 20 years. GOV.UK on redundancy pay. A week's pay is capped at £751 for dismissals on or after 6 April 2026, so the maximum payment is £22,530. SI 2026/310. These limits are reviewed each year, so check the current figure.

One duty here is regularly missed. An employee under notice of redundancy who will have two years' service by the date the notice expires, or by the date statutory minimum notice would have expired if later, is entitled to reasonable paid time off in working hours to look for work or arrange training, capped at 40% of a week's pay across the notice period. Employment Rights Act 1996, section 52, section 53.

Looking for another job for the person is part of acting reasonably, and it is the step most often skipped. Acas puts it as a requirement: you must try to move anyone selected for redundancy into other jobs in your organisation, which is called offering suitable alternative employment, and the offer must be put in writing, made before the current contract ends, and start within four weeks of the current role ending. Acas on offering alternative employment. One duty here is absolute rather than a matter of reasonableness: pregnant employees and new parents must be offered suitable alternative vacancies as a priority over other employees.

An employee who takes an alternative role on different terms has a statutory trial period of four weeks from the day they start it, extended only by a written retraining agreement made before they start. Employment Rights Act 1996, section 138. If the offer was of the same terms, or of different terms that were suitable, and the employee unreasonably refuses it, they lose the entitlement to a statutory redundancy payment. The same applies where the terms differ, the new job was suitable, and the employee unreasonably resigns during the trial period. Employment Rights Act 1996, section 141. Whether a refusal was unreasonable turns on the individual's circumstances, so seek appropriate advice before withholding a payment.

Where the redundancy follows a business transfer, a merger or an acquisition, different rules apply first: start with the Acas guidance on TUPE.

Get the file and the dates ready before 1 January 2027

The redundancy file is the whole of the defence if the decision is questioned. For one or two roles it is short: the business case, the at-risk letter, the scoring sheet and its evidence, the dated consultation notes, the alternative roles considered, the notice letter, and any appeal outcome.

How long to keep it has changed. Since 1 October 2026 the time limit for starting most tribunal claims has been six months rather than three, which pushes the point at which the file is safe to delete well into the following year. Commencement regulations, SI 2026/954, Government guidance on tribunal time limits. Our guide to how long to keep leaver records works the arithmetic through and sets a retention period that is justified rather than assumed.

The change on 1 January 2027 is the reason to look at the process now rather than in December. Until then, an employee with less than two years' service cannot usually bring an ordinary unfair dismissal claim. From that date the qualifying period is six months, the right to request written reasons falls to six months as well, and the cap on the compensatory award goes. The changes apply across England, Scotland and Wales and not in Northern Ireland. Government guidance on unfair dismissal rights.

Because the rule turns on the effective date of termination, a redundancy decided in November 2026 with a notice period running into January falls under the new qualifying period. Any process you start now whose leaving date could fall on or after 1 January 2027 therefore has to work for someone with six months' service, which in practice means every process from now on.

One further change is worth watching without acting on it. The Employment Rights Act 2025 has enacted a second trigger for collective consultation, not yet in force, set by reference to a threshold number of employees across the employer rather than at one establishment. That threshold has to be set by regulations under section 195A, which have not been made, and the Act prevents them setting it below 20. Trade Union and Labour Relations (Consolidation) Act 1992, section 195A. The government's timetable lists the collective consultation threshold under 2027 with no date. The protective award for failing to consult collectively did change: its maximum rose to 180 days' pay for dismissals on or after 6 April 2026. Government guidance on collective redundancy. Neither point reaches a business making one or two roles redundant today.

Give the preparation one owner, usually whoever holds the contracts. The work is a morning: write the steps down in the order Acas gives them, draft the at-risk and notice letters once so they are not written under pressure, and decide which three criteria you would score against and what evidence exists for each. Before any decision about an individual, check the current guidance and seek appropriate advice. The preparation also belongs on your action list for the 2026 and 2027 changes, and our guide to putting employment changes into practice sets out how to keep that list honest about what is in force and what is still scheduled.

Common questions

Do I have to consult if I am only making one person redundant?

There is no statutory consultation procedure below 20 redundancies, and Acas says there are no rules in legislation for how long individual consultation should last. Acas on redundancy consultations. The fairness of the dismissal is still judged under section 98(4) of the Employment Rights Act 1996, and GOV.UK states that if you do not consult, "any redundancies you make will almost certainly be unfair and you could be taken to an employment tribunal". GOV.UK on redundancy consultations. Acas suggests at least one private meeting with each affected employee, before the decision is made.

Do I have to offer an appeal against a redundancy decision?

No. Acas describes an appeal as good practice rather than a legal requirement, and suggests a senior manager who was not involved in the decision should hear it, with five days a reasonable period for the employee to appeal and the outcome put in writing. Where there is nobody more senior and uninvolved, Acas says the person leading the appeal should be as impartial as possible, and adds that you could consider using an independent consultant to help in making the decision. Acas on offering an appeals process.

Can a whole team be left out of the redundancy selection pool?

It depends on whether that team does the same or similar work as the people at risk. Acas says each pool should include all roles that are the same or similar, and notes that where a whole team or specific group is being made redundant you will already have a list of roles. Acas on selecting employees for redundancy. Section 105 of the Employment Rights Act 1996 looks at whether the circumstances applied equally to other employees in the same undertaking holding similar positions who were not dismissed.

Does the six-month unfair dismissal change apply to a redundancy started in 2026?

It applies by reference to the effective date of termination, not the date the decision was taken. The commencement regulations say the amendments have effect where an employee is dismissed before 1 January 2027 but the effective date of termination falls on or after it. Commencement regulations, SI 2026/559. A notice period running into January therefore falls under the six-month qualifying period. Our probation and six-month qualifying period checklist covers the same date for probation and performance decisions.