The Redundancy Process Most Businesses Run Would Not Survive Fifteen Minutes of Cross-Examination.

There is a particular kind of confidence that accompanies most redundancy processes: the confidence that comes from having followed a template. The business has a genuine reason for the restructure. The pool has been defined. The selection criteria have been applied. The consultation meetings have been held. The outcome letters have been sent. Everything looks procedurally correct on paper.

Then a claim is brought. And an employment judge, or more uncomfortably, a cross-examining barrister, begins to ask questions that the template did not anticipate. Why was the pool defined to include only three people when ten people do substantially similar work? How were the selection scores moderated between managers who have different standards of assessment? At which point in the consultation process did the employer genuinely consider the alternatives proposed by the employee? And why does the scoring matrix correlate so precisely with the employer’s prior view of which individuals should be retained?

These are not hostile questions. They are the standard questions that any competent employment lawyer will ask when testing the fairness of a redundancy process. And in most mid-market businesses, the answers are considerably less robust than the process documentation suggests.

The Business Reason That Is Not a Business Reason

Section 98 of the Employment Rights Act 1996 identifies redundancy as a potentially fair reason for dismissal. The starting point for any redundancy process is therefore a genuine business reason: a reduction in the requirement for employees to carry out work of a particular kind. Most businesses can articulate this. Revenue has declined. A function is being restructured. A location is closing. Technology has made certain roles unnecessary.

Where businesses fail is in the specificity and documentation of the business case. A tribunal will examine not just whether a business reason existed but whether it was genuine, meaning that the decision to reduce headcount was driven by the stated business reason and not by a desire to remove specific individuals under the cover of redundancy. The test is not whether the employer can articulate a reason. It is whether the documentation created at the time the decision was made supports the reason the employer now relies on.

A business that decides to restructure its sales team and then defines the pool, selects the criteria, and applies the scores in a way that produces the outcome it wanted from the beginning has not conducted a redundancy process. It has conducted a performance-managed exit with redundancy paperwork. A tribunal will see through this, because the documentation will show a process that worked backward from a conclusion, and the cross-examination will expose the gaps between the stated reason and the actual motivation.

The Pool Definition Problem

Pool definition is the most consequential and most frequently mishandled element of any redundancy selection process. The pool determines which employees are at risk of redundancy, and the way it is defined determines whether the process is genuinely fair or structurally predetermined.

The legal principle is straightforward: the pool should include all employees who do work of a similar kind, or who could reasonably do the work that will remain after the restructure. In practice, most employers define the pool more narrowly than this, either because they have not properly analysed which roles are genuinely interchangeable, or because they have defined the pool to produce a specific outcome.

The most common error is the pool of one: a role is identified as redundant, and the incumbent is the only person in the pool. This can be legitimate if the role is genuinely unique. But if other employees perform substantially similar work, a pool of one will be challenged as an attempt to target a specific individual. The tribunal will compare the work done by the selected employee with the work done by employees who were not included in the pool, and if the overlap is significant, the pool definition will be found to be unreasonable.

At Esbee, when we design redundancy processes for clients, pool definition is the element that receives the most scrutiny, because it is the element most likely to be challenged and the one where an error is most difficult to correct retrospectively. A pool that is too narrow invites a claim of predetermination. A pool that is too broad may include employees whose roles are not genuinely at risk, creating unnecessary anxiety and potential claims from individuals who should never have been in scope.

Selection criteria that sound objective but are applied subjectively by managers who have already decided who they want to keep. A tribunal will see through this in minutes.

The Selection Criteria Illusion

Selection criteria are supposed to introduce objectivity into the redundancy decision. They typically include categories such as performance, skills and qualifications, attendance record, and disciplinary record. Each category is scored, the scores are totalled, and the employee with the lowest score is selected for redundancy.

The problem is that objectivity in scoring depends entirely on the quality and consistency of the underlying data. Performance scores are meaningful only if the business has a functioning performance management system that produces comparable data across employees. In most mid-market businesses, performance management is inconsistent, undocumented, or both. The manager applying the performance criterion is not drawing on a body of documented evidence. They are recalling their impression of the employee’s performance and translating it into a number. That number feels objective because it is numerical. It is not objective. It is a subjective judgment wearing numerical clothing.

The Williams v Compair Maxam guidelines established decades ago that selection criteria should be objectively verifiable wherever possible. A tribunal will ask: what evidence did the scoring manager rely on? Were the scores moderated to ensure consistency across different assessors? Was the employee given an opportunity to challenge their scores during consultation? If the answer to any of these is no, the selection process is vulnerable.

The Consultation That Is Not Consultation

The legal requirement for consultation in a redundancy process is that the employer must consult genuinely and meaningfully with affected employees before making a final decision. This means considering alternatives to redundancy, considering alternative roles within the business, and genuinely engaging with any representations the employee makes.

Most businesses treat consultation as a series of scripted meetings in which the decision has already been made and the meetings exist to create a paper trail. The meeting notes record that the employee was informed of the proposal, that they were invited to make representations, and that their representations were considered. What the notes do not record, because it did not happen, is any genuine engagement with the employee’s proposals, any serious consideration of alternatives, or any willingness to modify the outcome based on the consultation.

A tribunal judge who has read thousands of consultation meeting notes can identify a performative consultation with ease. The notes are too uniform. The responses to employee representations are too formulaic. The outcome was communicated with insufficient time between the final consultation meeting and the confirmation letter for genuine consideration to have taken place. The overall pattern tells a story of a process that was procedurally complete but substantively empty.

Collective consultation obligations under Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 add a further dimension when twenty or more redundancies are proposed at one establishment within a ninety-day period. The requirement for a forty-five day consultation period for one hundred or more redundancies, or thirty days for twenty to ninety-nine, is frequently triggered by restructuring programmes that the business did not initially recognise as meeting the threshold. The penalty for failing to comply is a protective award of up to ninety days’ pay per affected employee, which for a business making thirty people redundant could represent a liability of several hundred thousand pounds.

The Alternative Employment You Did Not Offer

An employer conducting a redundancy process has an obligation to consider whether there are any suitable alternative roles within the business that could be offered to the affected employee. This obligation is frequently neglected, not out of bad faith, but out of a failure to think systematically about what roles exist, what roles are being recruited for, and whether any of them could reasonably be offered.

Esbee’s HR services team includes alternative employment assessment as a standard element of every redundancy process we manage, because the failure to offer a suitable alternative role is one of the most common grounds on which an otherwise well-conducted redundancy is found to be unfair. The assessment is not complex, it requires a comparison of the redundant role with vacant roles across the business, but it requires someone to do it thoroughly rather than dismissing it as a formality.

For businesses operating within a group structure, including PE-backed portfolio companies with sister companies under common ownership, the obligation extends to suitable alternative roles across the group. This is an area where businesses routinely fail, because the HR team in one portfolio company may have no visibility of vacancies in another, and the operating partner or group function has not established a mechanism for sharing this information during restructuring.

The Uncomfortable Conclusion

A redundancy process is a legal process. It is not an HR administrative exercise with legal overlay. Every element, from the business case through pool definition, selection criteria, consultation, and alternative employment, will be examined by a tribunal against specific legal standards. The question is not whether a process was followed. It is whether that process would survive the specific, detailed, forensic questioning that a competent employment lawyer will apply.

Most businesses discover the gaps in their redundancy processes only when a claim is brought and the cross-examination begins. The cost of that discovery, in legal fees, compensation, management time, and reputational damage, is a multiple of the cost of designing the process properly in the first place. An HR MOT assesses whether your redundancy procedures, as currently documented, would withstand that scrutiny. The cost of finding out now is considerably less than the cost of finding out in front of a judge.

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If you’re planning a restructure and want to ensure the process is genuinely defensible, not just template-compliant, talk to us. Esbee’s HR consultancy team designs and manages redundancy processes for businesses of all sizes, including PE-backed portfolio companies under value creation pressure.