A Redundancy Letter is a formal written notice issued by an employer in England and Wales to an employee to inform them that their role is redundant and that their employment is therefore being terminated. It is the culmination of the redundancy process — coming after a genuine redundancy situation has been identified, a fair selection process has been completed, and meaningful consultation has taken place — and it sets out the key terms of the redundancy, including the notice period, the last day of employment, and the redundancy pay entitlement.

Under Section 139 of the Employment Rights Act 1996, a dismissal is by reason of redundancy where the employer has ceased or intends to cease carrying on business at the location where the employee is employed, or where the requirement for employees to carry out work of a particular kind has ceased or diminished. A genuine redundancy situation must exist for the letter to be legally sound: redundancy cannot be used as a pretext to dismiss an employee for another reason, such as poor performance or a personality conflict, without exposing the employer to an unfair dismissal claim.

Employees with at least two complete years of continuous service have a statutory right not to be unfairly dismissed under Part X of the Employment Rights Act 1996, and a redundancy dismissal must be both substantively and procedurally fair to withstand scrutiny at an Employment Tribunal. Substantive fairness requires a genuine redundancy situation and a fair selection process. Procedural fairness requires meaningful consultation, consideration of alternatives to redundancy, and — where appropriate — offering a right of appeal.

A formal redundancy letter also triggers the employee's entitlement to statutory redundancy pay under Sections 135–165 of the Employment Rights Act 1996, provided they have at least two years of continuous service. The redundancy letter documents the key information needed to calculate this entitlement, including the employee's start date and years of service. For larger redundancy exercises involving 20 or more employees within 90 days, the collective consultation obligations under Sections 188–198 of the Trade Union and Labour Relations (Consolidation) Act 1992 apply in addition to the individual process.

A redundancy letter is needed whenever an employer in England and Wales has completed a genuine redundancy process in respect of an individual employee and wishes to formally notify that employee that their employment is being terminated by reason of redundancy. The letter should only be issued after the consultation process has been completed — issuing a redundancy letter before consultation has genuinely taken place is a procedural failing that may render the dismissal unfair.

Common circumstances in which a redundancy arises include: a business or workplace closure, where the employer is shutting down entirely or closing a particular site; a reorganisation or restructuring, where certain roles are no longer needed in the new operating model; a reduction in workload or client demand, where there is no longer enough work to justify the number of employees in a particular function; the introduction of new technology or automation that removes the need for certain roles; or a merger or acquisition, where duplicate roles in the combined entity are eliminated.

Before issuing a redundancy letter, the employer should have: identified a genuine redundancy situation; defined the selection pool of employees who may be affected; applied fair, objective, and consistently applied selection criteria to determine which employees are selected; carried out meaningful individual consultation — ideally at least two meetings — at which the employee has been given a genuine opportunity to suggest alternatives to redundancy; considered any alternatives to redundancy such as redeployment, reduced hours, or voluntary redundancy; and, where the redundancy involves 20 or more employees within 90 days, complied with the collective consultation requirements under the Trade Union and Labour Relations (Consolidation) Act 1992.

A redundancy letter should be issued promptly once the decision to make the individual redundant has been made, following the completion of consultation. Any unreasonable delay in issuing the formal notice can create uncertainty for the employee and may be viewed negatively by an Employment Tribunal.

A legally compliant redundancy letter for use in England and Wales must contain a number of essential elements to protect both the employer's and the employee's legal positions.

First, the letter must clearly identify the reason for the redundancy, explaining the business circumstances that have given rise to the redundancy situation in terms that correspond to the statutory definition in Section 139 of the Employment Rights Act 1996. A vague or formulaic explanation — such as 'for operational reasons' — is less defensible than a specific account of the business changes that have necessitated the redundancy.

Second, the letter should summarise the consultation process that has been undertaken, confirming the dates and nature of the consultation meetings and acknowledging that the employee was given the opportunity to suggest alternatives to redundancy. This demonstrates that the consultation was genuine and not merely a formality.

Third, where the redundancy involves a pool of employees, the letter should describe the selection pool and the selection criteria applied, and explain how the employee scored against those criteria. This transparency is important both as a matter of fairness and to enable the employee to understand the basis of the decision if they wish to appeal.

Fourth, the notice period and last day of employment must be clearly stated. The notice period must comply with the employee's contractual notice entitlement and the minimum statutory notice requirements under Section 86 of the Employment Rights Act 1996, whichever is greater. If the employer intends to place the employee on garden leave or make a payment in lieu of notice, this must also be stated.

Fifth, the employee's statutory redundancy pay entitlement must be set out, calculated in accordance with Sections 135–162 of the Employment Rights Act 1996 based on age, weekly pay (subject to the statutory cap), and years of service. Any enhanced redundancy payment above the statutory minimum should also be described.

Finally, the letter should address accrued annual leave, the return of company property, post-employment obligations under the contract of employment, and — as a matter of good practice — the right of appeal against the redundancy decision.