Do you know that, according to data, redundancies in the UK stood at 134,000 as of late 2025? This figure reflects a tightening labor market.
Organisations need to cut costs and restructure in this dynamic business world. One of the most sensitive outcomes of such changes is redundancy. It is not just a business decision but a human concern that requires fairness and legality.
This blog will be helpful to you if you want to learn more about its procedure and affects. Let’s begin!
What is redundancy in CIPD?
In CIPD, redundancy is basically dismissal from employment. According to the Employment Rights Act 1996, redundancy is when:
- The employer is shutting down the business.
- The employer is shutting down a specific team or department in the organisation.
- The employer is shutting down the business at a specific location even if they are relocating somewhere else.
- The employer needs fewer employees for a particular kind of work, i.e. reduction in the size of the workforce.
Moreover, redundancy is a legal and fair reason for dismissal. The employer just needs to have a genuine reason, conduct a fair redundancy procedure and offer an alternative employment if available or explore potential options to avoid redundancy.
CIPD emphasises that redundancy is about the job and not the person. Also, it should be the last resort.
The redundancy procedure:
According to CIPD, employers must follow a legal and transparent procedure when handling redundancy. This is because if not handled lawfully, it can affect the employer’s reputation and employee morale.
First step: Planning
The first step is careful planning. Moreover, employers must look for alternative options such as reduced working hours, temporary layoffs, pay freezes or retraining. Also, they must try to avoid it as much as possible.
Furthermore, the employers must make sure that these alternative options align with the terms of their employees’ contracts.
CIPD emphasises that redundancy must not be a shortcut for poor performance management.
Second step: Consultation
This step is an ethical and legal requirement. It involves informing the employees early; they must have a chance to ask questions and employers must consider the employee feedback.
Moreover, if multiple employees are affected, then employers must consider employee representatives and provide written reasons.
It is a crucial step.
Third step: Fair selection criteria
This step must be objective and conducted without any biases. The collective redundancy group refers to the group of people who are chosen for redundancy. These are the people who perform similar roles, work at a similar location, whose work has been reduced or shut down and who are members of the same department. This criterion is fair.
The unfair criteria include age, disability or personal relationships.
If this step is not done accurately, then it is considered a legally unfair dismissal.
Fourth step: Seek volunteers
Inviting applications for voluntary redundancy can avoid the need for compulsory redundancy.
Fifth step: Objective criteria
When making compulsory redundancies, employers must use objective criteria such as skills, experience and performance records instead of subjective criteria.
Sixth step: Redundancy pay and notice period
Employees who are selected for redundancy are entitled to statutory and contractual notice. Also, a redundancy pay. This pay depends on length of service, age and weekly pay.
Seventh step: Support and aftercare
CIPD place strong focus on employee well-being during redundancy.
The support involves career counseling, CV writing workshops, time off to attend interviews and some mental health support.
Moreover, students studying HR or CIPD often seek aCIPD assignment writer orCIPD level 7 assignment help to gain clarity in this procedure.
What are the effects of redundancy?
1. On employees:
- Financial upheaval: loss of income, not able to meet expenses, reduction in lifestyle and increased reliance on savings.
- Emotional and psychological impact: stress and anxiety, loss of confidence, depression.
- Career disruption: loss of seniority and difficulty in securing equivalent employment.
2. On organisation:
- Survivor syndrome: the remaining employees are guilty and have fear for their own job security. Also, they feel mistrust of management
- Reduced morale and productivity: the remaining staff will have reduced motivation and no trust in management.
- Workload increase: the remaining staff will have to cover the duties of the employees who left. This will lead to burnout.
3. On society and economy:
- Redundancy can increase unemployment rates and put pressure on the social welfare system.
What is the CIPD ethical approach to redundancy?
CIPD promotes an ethical approach to redundancy. Therefore, employers must treat every employee with dignity and respect. They must communicate openly and honestly, support employees beyond legal requirements and plan for their future workforce so they don’t have to suffer.
Final thoughts
Redundancy is not just an operational requirement but a complex human process. It demands fairness, transparency and compassion.
If the procedure is done fairly, it can help the organisations survive the challenging times without destroying anyone’s morale or trust.
It is not about dismissing employees but doing all of it legally, fairly and lawfully.
