With cost efficiency and resilience topping the priority list for many employers, we’re seeing a sharp increase in restructures and redundancy activity. But how this is handled can be the difference between a smooth transition and a costly, reputationally damaging tribunal.

In this blog, we explore what’s driving this trend and how to manage change in a fair, compliant and commercially sensible way.

The pressure of wage rises and automation

While broader economic factors continue to create uncertainty, several employment-specific developments are currently shaping business decisions.

The rise of artificial intelligence and other automation technologies is reshaping job roles across many sectors. While not replacing humans entirely, automation is changing how teams operate and what skills are required, often prompting structural change.

Closer to home, the Spring Budget has led to immediate cost increases for employers. Many felt the full impact in the April 2025 payroll, particularly due to increased National Insurance contributions and the reduced NIC secondary threshold, which together hit employer margins hard.

This financial pressure has been compounded by significant uplifts to National Minimum and Living Wage rates. The 6.7% increase to the National Living Wage is well above the average projected 3% pay rise this year. For employers of younger workers and apprentices, the hike is even steeper, up to 18% in some cases, forcing difficult decisions about headcount and affordability.

Redundancies predicted to increase

According to the latest CIPD Labour Market Outlook, around one in four employers expected to make redundancies by March 2025. With continued economic pressure and increased employment costs, this trend is expected to continue.

Alex Hurwood, Head of Employment and Solicitor at Bhayani Law, comments:

“More clients are coming to us for advice on restructuring and redundancy, often driven by rising costs and shifting operational needs. While these decisions are never easy, getting the process right from the start makes a huge difference in avoiding claims and maintaining employee trust.”

Managing restructures and redundancies properly

Restructures and redundancy programmes are complex, not only legally but emotionally and commercially. Mishandled processes can lead to claims of unfair dismissal, discrimination and breach of contract. Here’s where we see the biggest risks and the opportunities to get it right.

1. Define and communicate your business case clearly

Any proposal to make redundancies must be based on a genuine business rationale, whether it’s due to financial pressures, technological change or the need to reorganise.

You should be able to articulate this rationale clearly, consistently and in a way that employees understand. Keep your messaging transparent and ensure leadership teams are aligned. Remember, your communications could be scrutinised by a tribunal.

2. Apply fair and objective selection criteria

Redundancy selection must be free from bias and based on fair, transparent and consistently applied criteria. Whether you’re using performance metrics, skills matrices or attendance records, be ready to justify your choices with evidence.

If you’re unsure where to start, we can support you with tailored redundancy support and legal advice to ensure your process is legally sound and commercially fair.

3. Meaningful consultation is essential

One of the most common pitfalls in redundancy cases is failing to properly consult. Consultation must be genuine, decisions should not be finalised before the process begins, and employee feedback must be given real consideration.

The consultation period must be reasonable, and whether you’re consulting with individuals or collectively (for 20 or more employees), legal requirements must be met. Learn more about redundancy consultation obligations on our website or speak to our HR experts for guidance.

Don’t overlook protections for family-related leave

When planning redundancies, employers must be aware of enhanced protections for employees on or returning from family-related leave, including maternity, adoption, shared parental and paternity leave.

Under the new rules introduced in April 2024, the redundancy protection period for employees taking paternity leave now mirrors the protection given to maternity returners. This means those on or returning from paternity leave have priority status for suitable alternative vacancies in a redundancy situation. This enhanced protection is part of wider reforms under the Protection from Redundancy (Pregnancy and Family Leave) Act 2023.

Failing to consider these rights can lead to automatic unfair dismissal claims, even if the overall redundancy process appears fair on the surface. Employers should:

• Maintain clear records of employees on or returning from family leave
• Apply priority status correctly when suitable alternative roles exist
• Avoid assumptions about availability, interest or capability based on absence

How Bhayani Law can help

Redundancies are never easy, but with the right support, they can be managed in a way that protects your business and treats employees with respect.

At Bhayani Law, we work closely with employers to deliver legally compliant and commercially sensible redundancy programmes. Through our Watertight HR & Legal service, we can support you with:

• Drafting compliant redundancy letters and scripts
• Advising on fair selection criteria
• Navigating protections around maternity, paternity and other family-related leave
• Managing consultation meetings
• Minimising legal risk and reputational damage
• Representing you in tribunal claims, if needed

Whether you’re at the early stages of planning or responding to emerging issues, we’re here to help.

Contact our expert team to find out how we can support your redundancy process from start to finish. Call 0333 888 1360 or email [email protected]