The Bellevue Brief Podcasts – (Episode 5 Navigating Redundancy Ethically)

Why Ethics Matter More Than Ever

With the Employment Rights Bill soon likely to extend unfair dismissal protections to employees with only six months’ service (rather than two years’ service, as is the current requirement), Florence highlights that it will be more important than ever for employers to ensure their redundancy processes are legally compliant, firmly justified and ethically sound. This legal shift will leave anyone conducting more minimalist redundancy exercises increasingly exposed to potential litigation and reputational damage.

As well as reducing legal risk, a fair, transparent and non-transactional approach can preserve relationships during difficult times. After all, as Susie notes, redundancy can be a “deeply personal” (and often painful) experience for many employees. Employers who recognise this – and show sensitivity, flexibility and generosity in redundancy exercises in consequence – may find that their approaches foster trust, protect morale, and strengthen organisational culture. Ellie also highlighted the ripple effect of doing redundancy right:

“An ethical, transparent process has huge benefits for the business—it affects culture and how those left behind perceive the organisation.”

But what does it really mean to manage redundancy ethically? What steps should be taken, and what pitfalls avoided? Our speakers set out some helpful ‘do’s and don’ts’ for employers to consider (and employees to bear in mind).

Start at the Beginning: Do You Really Need Redundancies?

Before making cuts, consider whether they are truly necessary. Susie urges employers to pause and consider alternatives, noting that many organisations “turn to redundancy too quickly as a quick fix”, which can be “short-sighted and expensive.”

That’s because redundancy often comes with hidden costs— including those associated with the loss of institutional knowledge, disruption to morale, and rehiring expenses when business conditions improve. She added:

“If AI is changing what roles look like, ask whether your workforce can change with it.”

Shortcuts to temporary cost savings may be attractive in the moment, but what will happen beyond the short-term? Will new staff end up needing to be recruited if demand increases, and how much will it cost to hire and train them? All of these questions (and more) should be asked before pressing ahead with redundancy exits. Other options to explore include redeployment, retraining, flexible hours, and/or voluntary redundancy schemes. Such alternatives may preserve talent and goodwill, whilst still meeting financial objectives, and potentially avoiding legal / reputational risk.

Consultation: More Than Just Ticking a Box

Consultation isn’t optional — it’s a legal requirement. In situations where more than 20 people are potentially being made redundant, UK employers will need to consult collectively with employees; for smaller numbers, individual consultation will suffice. Legislation does not prescribe too closely what such a process may look beyond mandating that all redundancy exercises should be full and fair, without predetermined outcomes.

As Susie emphasised, consultation has to be “meaningful” – but too often, it is treated as a formality, after decisions have already been made. Meaningful consultation should mean engaging employees early, explaining the rationale behind decisions, and genuinely considering alternatives. Florence acknowledged some of the inherent tensions employers must face in balancing these concerns:

“Employers worry about destabilising morale, but failing to consult creates mistrust and resentment.”

Susie noted that employees often appreciate honesty. Early, honest conversations (even if unsettling) can give employees time to prepare mentally, emotionally, and financially for what may be ahead. 

Fair Selection and Transparency

When redundancies are unavoidable, fairness in selection is critical. Agreeing on clear, objective criteria and applying them consistently from the outset can help to avoid bias and discrimination. Proper consultation can also identify any potential scoring errors or bias and ensure employees feel heard.

Support Beyond Compliance

Ethical redundancy goes beyond legal obligations. Practical steps including but not limited to those listed below may make a real difference to how messaging is received:

• Issue FAQs and update them as matters progress.

• Provide pastoral support, eg signposting to an Employee Assistance Programme (if one is in place), or any equivalent services, to support staff mental health and wellbeing.

• Offer outplacement services for CV writing and interview coaching.

• Remember that small gestures, like allowing employees to keep devices or offering flexibility around notice periods, can go a long way.

All of this takes time, however, in relation to which Florence sounds a note of caution: 
“Plan sooner than you think you need to—it takes time to do this properly.”

Exit Packages: Timing and Tone

Only staff with more than two years’ service are entitled to statutory redundancy pay (SRP), and even where SRP is due, entitlements may be minimal. As a result, whilst some employers’ first instincts may be to avoid paying more than they need to, enhanced packages can smooth the process and reduce risk. Ellie simply puts it succinctly explains:

“Not enhancing the package can be short-sighted. Claims cost more than settlements.”

It is worth thinking outside the box when negotiating packages, as parties can agree non-financial elements in a settlement agreement that an Employment Tribunal would not have the power to award. One size does not fit all – nor should it. Whatever the topic on the table, however, discussions should remain respectful and flexible. Flexibility might include adjusting notice periods, waiving post-termination restrictive covenants, or offering practical support like extended healthcare coverage for employees undergoing treatment. Susie highlighted the importance of tone in maintaining good relations with the workforce throughout such discussions:

“There’s nothing worse than a flat ‘no’ to a reasonable request just because it’s not policy.”

Key Takeaways

Ultimately, managing redundancies ethically can protect culture, reputation, and long-term business health. As Florence summed up:

“Doing the right thing often turns out to be what’s best for the business.”

Employer Checklist for Ethical Redundancies

• Pause and assess – Is redundancy truly necessary? Have you explored redeployment, retraining, or voluntary exits?

• Plan early – Map out timelines, resources, personnel required and communication strategies. Prepare and maintain FAQs and designate support contacts.

• Consult meaningfully – Engage employees meaningfully at a formative stage. Explain the business rationale and consider alternatives.

• Ensure fair selection – Agree on objective criteria and apply consistently. Double check scoring for bias or errors.

• Communicate transparently – Use clear, honest language.

• Avoid surprises – Give employees time to prepare.

• Provide pastoral and practical support.

• Handle exit packages ethically – Enhanced packages, where possible, will help facilitate a smooth process. Be respectful and flexible in negotiations.

• Think beyond financials – Provide references and consider waiving restrictive covenants. Explore continuity for benefits like healthcare where feasible.