10 Redundancy Mistakes That Land UK Employers in Tribunal (And How to Avoid Every One)

Employment tribunal claims for unfair dismissal are up 72% year on year. The majority of cases that employers lose are not lost because the redundancy was wrong. They are lost because the process was wrong. These are the ten mistakes that trip up UK small businesses most often drawn from real tribunal decisions and employment law case history.

Why process matters more than you think

Here is the uncomfortable truth about redundancy law in the UK.

You can have a completely legitimate business reason for a redundancy. The role can be genuinely disappearing. The decision can be entirely reasonable. And you can still lose an unfair dismissal claim at an employment tribunal if the process you followed to get there was flawed.

Procedural flaws are one of the most common reasons employers fail in tribunal defence. Regardless of the employee's conduct, or whether the grounds for dismissal were substantively lawful, a failure in process can result in a finding of unfair dismissal.

Many tribunal claims arise from avoidable errors in the process rather than the decision itself.

Read that again. Avoidable. Every mistake on this list was avoidable. Every employer who made these mistakes could have protected themselves for a fraction of what the claim ultimately cost them.

Mistake 1: Deciding before you consult

This is the most common and most expensive mistake in redundancy law. Tribunals call it pre-determination. Employment lawyers call it a sham consultation. Both mean the same thing: the employer had already made up their mind before the consultation meeting began.

A common tribunal finding is that employers engaged in "sham consultation" — where meetings were held but outcomes were predetermined. This is one of the most common reasons redundancy dismissals are found unfair.

The legal requirement is not just to hold a meeting. It is to consult in a way that is genuinely capable of influencing the outcome. Meaningful consultation means the employees were consulted before the decisions were finalised and were able to have an impact on the result, and that the employer genuinely applied their mind to the redundancy process.

How tribunals spot pre-determination: the at-risk letter and confirmation letter were issued within days of each other. The consultation meeting lasted fifteen minutes. The employer cannot produce notes from the meeting. No alternatives raised by the employee were genuinely considered.

The rule: Go into every consultation meeting genuinely open to the possibility that the employee will say something that changes your thinking. If you cannot honestly say that, you are not consulting — you are performing.

Mistake 2: Using redundancy to disguise a performance issue

Confusing redundancy with performance issues is a common mistake. Redundancy relates to the role no longer being required, whereas performance concerns relate to how well an employee performs in their role. Where performance is the real issue, employers should follow a capability process. Disguising it as a redundancy situation can backfire, as it would not be the real reason for dismissal, thereby increasing the risk of an unfair dismissal claim.

This happens more often than employers admit. A difficult employee, a personality clash, a performance issue that was never properly managed. The employer looks for a way out and lands on "restructuring." The role conveniently disappears. Except tribunals are experienced at identifying exactly this pattern.

If the redundancy coincides with performance concerns that were never formally addressed, if the employee had recently received a negative appraisal, or if the role quietly reappears in a slightly different form after the employee leaves, a tribunal will ask hard questions.

The rule: Redundancy is for roles that are genuinely no longer required. If the real issue is the person rather than the role, follow the correct capability or disciplinary process. It is harder, but it is the legally defensible route.

Mistake 3: Not sharing selection scores with the employee

This specific error has been the subject of significant case law in recent years. In the Lidl case decided in 2025, the tribunal found significant failings in Lidl's consultation process — the claimant was not given a meaningful opportunity to challenge his scores, and managers were instructed to destroy notes explaining the scoring rationale.

The principle is straightforward. If you have scored employees against a selection matrix to determine who is made redundant, the affected employee must have the opportunity to see and challenge those scores during the consultation process — not after dismissal, not at appeal.

The employee was not told how he, or his colleagues, had been scored against the selection criteria. The employee was not given his own matrix scores until after his dismissal when he internally appealed the redundancy. This was found to be procedurally unfair.

The rule: Share the employee's scores with them during the consultation process. Give them a genuine opportunity to challenge any score they believe is wrong. Record their challenge and your response. This is not a weakness in your process — it is what makes the process legally defensible.

Mistake 4: Selection criteria that discriminate without you realising it

You do not have to intend to discriminate for your selection process to be found discriminatory. Indirect discrimination — where a criterion appears neutral but disproportionately disadvantages a protected group — is one of the most common legal pitfalls in redundancy selection.

In the Lidl case, the claimant suffered a disadvantage when he was scored one point less for not having a degree, and this had resulted in his selection for redundancy. The employer had not sought to objectively justify the inclusion of this qualification.

The most common problem criteria are attendance and length of service.

Using attendance records without excluding absences related to disability, pregnancy, or other protected medical conditions is discriminatory. The absences were not the employee's fault. Penalising them for those absences treats them less favourably because of a protected characteristic.

Using length of service as the sole or primary criterion can constitute indirect age discrimination, because it disproportionately affects younger workers.

The rule: Before finalising your selection criteria, ask yourself whether each criterion could disproportionately disadvantage women, older workers, younger workers, employees with disabilities, or employees who have taken parental leave. If the answer is yes, either remove the criterion or be able to objectively justify why it is a genuine business requirement.

Mistake 5: Failing to consider suitable alternative employment

Before confirming any redundancy, an employer has a legal obligation to genuinely consider whether any suitable alternative role exists within the business. This is not optional and it is not a formality.

A suitable alternative role is one that is broadly comparable in terms of pay, status, skills required, and location. It does not need to be identical. If a broadly comparable role exists and you did not offer it to the affected employee, the redundancy is likely to be found unfair.

Where an employee on maternity leave is made redundant, the obligation goes further. It will be an automatically unfair dismissal if an employee is selected for redundancy on the grounds of pregnancy or due to taking maternity leave, and an employee on maternity leave has a right to be offered a suitable alternative vacancy if one exists.

The rule: Before issuing the confirmation letter, document your search for suitable alternative employment. What roles exist? Are any broadly comparable? If yes, offer them in writing. If no, record that you searched and found nothing suitable. This documentation is your protection.

Mistake 6: Using a single criterion that effectively makes the decision for you

In a striking case, a nurse was made redundant on the basis that her fixed-term contract expired sooner than her colleague's. As soon as proximity of expiry became the criterion, she was doomed. Choosing that criterion was in effect making the redundancy decision, and since there was no consultation prior to that, the dismissal was found unfair.

The principle is that if a single criterion effectively predetermines the outcome — removing all genuine choice from the selection process — the consultation that follows is meaningless. The decision had already been made the moment the criterion was chosen.

This is a subtler version of mistake 1, and it catches employers who believe they are following a fair process because they used a scoring matrix. If the matrix was designed around a predetermined outcome, the matrix does not protect you.

The rule: Selection criteria must be genuinely capable of producing a range of outcomes across the pool. If the criterion you are using effectively guarantees a particular result before any scoring begins, it will not withstand scrutiny.

Mistake 7: Conducting redundancy for someone on maternity leave without specialist guidance

Redundancy during maternity leave is one of the highest-risk scenarios in employment law. The employee has enhanced protections. The scrutiny is intense. And the consequences of getting it wrong extend beyond unfair dismissal into discrimination, which carries uncapped compensation.

It transpired that a manager had worked before with the consultant who got the new role. The tribunal was very quick to find that the claimant had been unfairly dismissed, and declared the redundancy a "sham." The judge found it inconceivable that no emails or documents existed explaining the decision. The redundancy was deemed not genuine, and the claimant had been treated unfavourably because of her maternity leave.

Timing is everything in these cases. A redundancy that occurs while an employee is on maternity leave, or shortly after they return, will always attract scrutiny. The employer must be able to demonstrate unambiguously that the redundancy decision had nothing to do with the maternity leave.

The rule: If the affected employee is on maternity leave, has recently returned from maternity leave, or is pregnant, do not proceed without specialist HR advice. The cost of that advice is trivial compared to the cost of an automatically unfair dismissal claim.

Mistake 8: No documentation, or documentation that was destroyed

Employers who cannot properly document their selection scoring or decision-making process often find themselves in difficulty. Tribunals need to see clear evidence of how decisions were reached.

And in the Lidl case, the situation was made significantly worse because managers were instructed to destroy notes explaining the scoring rationale. This was catastrophic for the employer's position. A tribunal that discovers documents were destroyed will draw the most adverse inference possible about what those documents would have shown.

Even without deliberate destruction, a lack of documentation puts you in a very weak position. You may remember that the consultation was genuine. You may know that you genuinely considered alternatives. But if you cannot show the tribunal a dated, written record of what happened and when, you are asking them to take your word for it — against an employee who says the opposite.

The rule: Document everything. The business case for the redundancy. The selection criteria and scoring matrix. The invitation to the consultation meeting. Notes from the consultation meeting. The alternatives that were raised and why they were rejected. The search for suitable alternative employment. Keep all of it for a minimum of three years.

Mistake 9: Reading a script at the consultation meeting

Tribunals may be quick to criticise and question the genuineness of the consultation process if the script is merely quickly read aloud verbatim by the manager. This is primarily a training issue — managers should be given training as to how to undertake consultation meetings, and they should also be alerted to the fact that even in a genuine redundancy situation, failures in the consultation process can render a dismissal unfair.

This is a surprisingly common mistake. The manager is nervous. They have been given a script by HR or an adviser. They read it out word for word and ask the employee to sign a note confirming the meeting happened. No genuine conversation. No genuine listening. No genuine consideration of anything the employee says.

A consultation meeting is not a performance. It is a conversation. The employee must have a genuine opportunity to ask questions, raise concerns, suggest alternatives, and challenge any aspect of the process. If they raise something credible, you must respond to it substantively — not deflect it.

The rule: Use an agenda and script as a guide, not a script to be read aloud. Make eye contact. Listen. Take notes in real time. Ask the employee directly: do you have any suggestions for how this redundancy could be avoided? Record their answer. Respond to it genuinely.

Mistake 10: Getting the financial calculation wrong

The process failures above are the ones that create unfair dismissal liability. But a separate category of mistakes creates financial disputes even in an otherwise fair redundancy — and they are entirely avoidable.

The most common calculation errors are:

Using the employee's actual weekly pay without applying the statutory cap of £643. Any weekly pay above this figure must be capped for redundancy calculation purposes.

Counting incomplete years of service. Only complete years count. An employee with four years and eleven months of service is entitled to the calculation for four years, not five.

Forgetting accrued holiday pay. This is the most commonly overlooked payment. The employee is entitled to pay for any untaken statutory holiday accrued up to their last day of employment.

Getting the notice period wrong. The correct notice period is the higher of the contractual notice period or the statutory minimum. Using the lower figure underpays the employee.

Using an out-of-date weekly pay cap. The cap is reviewed annually every April. Using last year's figure — even by a few pounds — creates a dispute.

The rule: Calculate redundancy pay, notice pay, and holiday pay carefully. Provide the employee with a written calculation statement showing your workings. An underpayment that could have been resolved for a few hundred pounds becomes a tribunal claim for thousands.

The pattern behind all ten mistakes

Look at this list and a pattern emerges. Most of these mistakes share a common root cause: the employer treated the process as a formality rather than a genuine legal obligation.

They consulted, but not genuinely. They scored, but not transparently. They documented, but not thoroughly. They considered alternatives, but not seriously.

Employment tribunals are not fooled by going through the motions. They look at the substance of what happened, not just whether the boxes were ticked. An employer who can demonstrate that every step was genuine, documented, and fair is in a strong position even when things go wrong. An employer who cannot is exposed.

The good news is that every mistake on this list is preventable and this is where Redundly comes in. By using Redundly you tell us about your situation and we provide a step by step guide on how to deliver a legally sound redundancy process.

Redundly guides UK small business owners through a legally structured redundancy process, flags the risk situations on this list before you act, and generates all the documentation you need to demonstrate a fair process. From £149 at redundly.co.uk. If your situation involves a protected employee, a complex selection pool, or any of the higher-risk scenarios described above, our specialist HR consultants are available for a one-hour consultation from £150.