Your legal obligations when restructuring
The consultation process is not optional and it’s not a formality. Before any decision is confirmed, affected employees must be formally put “at risk” and given a genuine opportunity to discuss alternatives, raise concerns and be heard. An employment tribunal will look closely at whether the consultation was meaningful. A letter, a meeting, and a decision already made before either happens does not constitute proper consultation, this is known as a ‘sham’ redundancy.
If you’re making 20 or more redundancies in 90 days, you must notify the Redundancy Payments Service via an HR1 form before individual consultation begins. For collective redundancies of 20 to 99 employees, the minimum consultation period is 30 days. For 100 or more, it’s 45 days. These are legal minimums, not targets. ACAS guidance on redundancy makes clear that good practice usually exceeds these minimums.
Selection criteria matter enormously. If you’re reducing a team and deciding which roles to keep, the criteria you use must be objective, measurable and consistently applied across the affected pool. Skills, performance records, attendance, experience. Not “attitude” or “team fit”, which are subjective and impossible to defend in tribunal. The moment your criteria can’t be evidenced clearly, you’re at risk.
Managing redundancy pay and notice correctly
Employees with two or more years of continuous service are entitled to statutory redundancy pay, calculated by age, weekly pay (subject to the statutory cap) and years of service. On top of this, contractual or statutory notice must be honoured, either by working it out or paying in lieu.
Before confirming any redundancy, you’re also required to consider whether a suitable alternative role exists within the organisation. This isn’t optional. If an alternative role is available and not offered, or if an employee unreasonably refuses a genuine alternative, it changes what they’re entitled to. Getting this wrong is one of the most common reasons otherwise lawful redundancies become unfair dismissals.
The hidden cost of a restructure that goes wrong
The employees who aren’t directly affected by the restructure are watching everything. How you communicate, how much respect you show to those leaving and how honestly you explain the reasons all shape the culture you’re left with once the process is complete. A restructure that’s legally compliant but handled coldly will still damage your organisation.
Loss of trust, disengagement among the people who remain, service disruptions while teams settle and a reputation that makes recruitment harder for years afterwards. These are the real costs of a poorly executed restructure, and none of them show up in the immediate financial case for the change.
The mistakes that most often lead to tribunal claims
The most common errors we see employers make are announcing the restructure before consulting (effectively making the decision before the process begins), using vague or subjective selection criteria that can’t be evidenced, and failing to seriously consider alternative roles before confirming redundancy. Inadequate notice periods and incorrect redundancy pay calculations account for many more claims. And employers who attempt to change terms and conditions immediately after a restructure, rather than following the correct variation process, frequently find themselves in difficulties.
None of these mistakes are inevitable. They’re almost always the result of trying to move too quickly, without proper HR support, through a process that has real legal and human consequences.
What you should do now
- Get proper HR or legal advice before you announce anything. The process must be right from the first communication.
- Map out which roles are genuinely at risk and why, before any names are discussed.
- Build your selection criteria before you apply them, not afterwards.
- Review alternative roles across the whole organisation, not just the immediate team.
- Plan your communications carefully. What you say, when you say it, and who delivers it all matter.
How Limelite can help
Restructuring is one of the highest-risk HR processes a business can go through. Limelite works with organisations across Worcestershire, Birmingham and the wider UK to manage restructures properly, from the initial planning stage through to final consultation and settlement. We’ve worked with all kinds of organisations to undertake restructures, including media, education, manufacturing and charity. We can help you get the process right the first time and avoid the claims that follow when it goes wrong. Take a look at our restructure and redundancy process management service page to see exactly how we can help.
If you’re considering a restructure or already in the middle of one, talk to us. Our HR consultancy and retained HR support services are designed for exactly these situations. Book a free 30-minute discovery call to talk it through with no obligation.
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About the author
Laura Weston MCIPD, Senior HR Consultant at Limelite HR & Learning. Laura specialises in employment law, HR compliance, change management and policy support, helping organisations across Worcestershire and the UK navigate complex people challenges with confidence. Connect with Laura on LinkedIn.
