Wilko Redundancies: UK SME Guide To Consultation, Notice And Rights

When high-profile redundancies hit the headlines, it’s common to see a spike in searches about Wilko redundancies - and with that comes a wave of small business owners quietly asking the same question:

“If my business ever needs to make redundancies, what do I actually have to do - and how do I do it properly?”

Redundancy can feel like one of the toughest parts of running a business. You’re balancing commercial reality, your team’s livelihoods, and strict legal obligations - often under serious time pressure.

The good news is that, with the right process, redundancies can be handled fairly and lawfully. In this guide, we’ll walk you through what UK SMEs need to know about redundancy consultation, notice, and employee rights - in plain English, with practical steps you can actually follow.

What Counts As A “Redundancy” In UK Employment Law?

In the UK, redundancy isn’t a catch-all label for “we can’t afford this role anymore”. It has a specific legal meaning.

A redundancy situation usually arises where you have a reduced need for employees to do work of a particular kind, or where your business (or a workplace) is closing or relocating.

Common redundancy scenarios for SMEs include:

• Business closure (e.g. shutting down a site, department, or the whole business)
• Workplace closure/relocation (e.g. moving operations and the role isn’t needed at the old location)
• Reduced demand (e.g. fewer orders, loss of a major contract)
• Reorganisation (e.g. merging roles, removing layers of management)
• Automation/technology changes (e.g. software replacing manual tasks)

It’s important to get this right early. If the reason for dismissal isn’t a genuine redundancy, you may be drifting into “dismissal for another reason” territory (like capability or conduct), which needs a different process and carries different risks.

Also remember: even where redundancy is genuine, you still need a fair process - redundancy isn’t an automatic “free pass” to dismiss.

Redundancy Consultation: What Do You Need To Do (And When Is It “Collective”)?

Consultation is where many businesses come unstuck - especially when decisions are made quickly and the “people process” is left until the end.

At a high level, redundancy consultation is about:

• explaining the business reasons for the proposed redundancies
• consulting on ways to avoid redundancies, reduce the number, and mitigate the impact
• giving affected employees a genuine opportunity to comment and propose alternatives

Individual Consultation (Even If It’s Just One Role)

Even if you’re making one person redundant, good practice (and often what a tribunal will expect) is to carry out meaningful consultation.

That typically includes:

• an initial “at risk” meeting
• sharing the reasons, proposed selection pool (if relevant), and timeline
• inviting feedback and alternatives (reduced hours, redeployment, voluntary redundancy, etc.)
• at least one follow-up consultation meeting
• considering suitable alternative employment

If your contracts and policies aren’t clear on process, it’s worth tightening them up before you’re under pressure - many SMEs build this into their Employment Contract and supporting policies.

Collective Consultation (If You Propose 20+ Redundancies)

This is where the legal requirements become much more prescriptive.

You must carry out collective consultation if you propose making 20 or more employees redundant at one establishment within a period of 90 days or less.

Key points SMEs should know:

• You’ll need to consult with appropriate representatives (a recognised trade union, or elected employee reps).
• You must consult for minimum time periods before dismissals take effect: at least 30 days before the first dismissal takes effect if you propose 20 to 99 redundancies, and at least 45 days if you propose 100 or more.
• You may need to file an HR1 form to the Secretary of State (this is a common “missed step”).

The minimum collective consultation periods depend on numbers. If you want the timeframes clearly mapped out, the consultation period rules are a key reference point when you’re planning timelines and cashflow.

Why this matters: failing to collectively consult can lead to a protective award (a tribunal can award up to 90 days’ pay per affected employee). For an SME, that kind of liability can be business-threatening.

How Do You Select Employees Fairly (And Avoid Discrimination Risks)?

Even with a genuine redundancy reason, you still need a fair selection process.

As a small business, it’s tempting to think, “We’ll just pick the lowest performer,” or “We’ll keep the people we like working with.” That approach is where legal risk climbs fast.

Step 1: Identify The “Pool” For Selection

A selection pool is the group of employees who are doing the same or similar work, where you’re choosing who stays and who goes.

Sometimes, the pool is obvious (e.g. 3 admin assistants, and you only need 2). Other times, it requires careful thinking (e.g. roles overlap across departments, or employees do mixed duties).

Step 2: Use Objective Selection Criteria

Selection criteria should be as objective and evidence-based as possible. Common criteria include:

• skills and qualifications relevant to future business needs
• performance (based on records, not gut feel)
• disciplinary record (careful here - context matters)
• attendance (but be very cautious where absence relates to disability, pregnancy, or other protected reasons)

Many SMEs use a scoring approach to keep things consistent. If you’re setting one up, a redundancy scoring matrix can help you structure decisions and keep a clear paper trail.

Step 3: Watch For “Automatically Unfair” And Discrimination Triggers

Some dismissals carry higher risk, regardless of length of service. For example, dismissing someone because they’re pregnant, taking family leave, raising health and safety concerns, or whistleblowing can trigger serious claims.

Discrimination risks can also creep in through selection criteria. For example:

• Using absence as a criterion without adjusting for disability-related absence
• Using “flexibility” as a criterion in a way that disadvantages employees with caring responsibilities
• Using subjective “cultural fit” language

If you’re unsure, it’s usually cheaper to get advice before decisions are final than to defend a claim later.

Redundancy Notice: What Are Your Obligations On Timing And Pay?

Redundancy is not just about consultation - it’s also about ending employment properly.

That means giving the correct notice (or paying in lieu, if the contract allows it), and making sure final pay is accurate.

How Much Notice Must You Give?

Your starting point is:

• Contractual notice (what their contract says), as long as it meets at least statutory minimums
• Statutory notice (the legal minimum), which generally increases with length of service

Because notice rules can be misunderstood (especially where contracts are silent or have short notice clauses), it’s worth checking the redundancy notice period basics before you confirm timelines with staff.

Can You Use Pay In Lieu Of Notice (PILON)?

Sometimes, you may want an employee to leave immediately - for example, where there are confidentiality concerns, customer relationships, or simply to avoid disruption.

You can only safely do this if:

• there’s a PILON clause in the employment contract, and
• you follow the contract terms correctly

If you don’t have a PILON clause and you terminate immediately anyway, you may be breaching the contract - which can trigger wrongful dismissal risk.

Practical tip: if you need to use PILON, check how it should be calculated (basic pay only vs benefits too). The rules are often misunderstood, so it helps to have clarity on PILON pay timing and obligations.

What Should Be Included In Final Pay?

Final pay often includes:

• salary up to termination date
• notice pay (or PILON)
• payment for accrued but untaken holiday
• statutory redundancy pay (if eligible)
• any contractual redundancy pay (if your policy provides it)
• commission/bonus, if contractually due (this can be tricky)

This is where having a well-maintained Staff Handbook and consistent payroll records can save you a lot of back-and-forth.

Employee Rights In Redundancy: What SMEs Need To Budget For And Communicate Clearly

Employees have a number of rights in redundancy. From an SME perspective, the key is to understand what you must provide, what might be discretionary, and what needs clear communication.

Statutory Redundancy Pay

Eligible employees (generally those with at least 2 years’ continuous service) may be entitled to statutory redundancy pay.

The amount depends on age, length of service, and weekly pay (subject to statutory caps).

Even if you’re offering enhanced redundancy, you should still calculate the statutory baseline so you can show what is legally required vs what is additional.

Time Off To Look For Work Or Training

Some employees may be entitled to reasonable time off to look for new employment or arrange training (subject to eligibility rules and reasonableness).

Where an employee qualifies for this right (typically, employees with at least 2 years’ service who have been given notice of redundancy), they’re entitled to be paid for up to 40% of a week’s pay in total for that time off, even if more time off is agreed.

From a practical angle, agreeing a sensible approach early can reduce stress and conflict during notice periods.

Right To Be Offered Suitable Alternative Employment (Where Available)

You should actively consider whether there are any suitable roles elsewhere in your business that could avoid redundancy.

This is not just a “nice to have” - it’s a key part of a fair redundancy process.

In SMEs, redeployment is often informal (and that’s where misunderstandings happen). It helps to treat it as a structured step, including job descriptions, pay comparisons, and trial periods where appropriate (there is often a statutory 4-week trial period in a suitable alternative role). The process around suitable alternative employment is worth planning carefully, especially if multiple roles are changing at once.

Right Of Appeal

There’s no single “statutory redundancy appeal” rule that always applies, but offering an appeal is widely treated as a key part of procedural fairness.

It also gives you a final chance to correct errors before they escalate into a formal grievance or claim.

A Practical Redundancy Checklist For SMEs (What To Do First, Second, And Third)

If you’re facing potential redundancies, it’s easy to get overwhelmed. Here’s a practical sequence many SMEs follow to stay organised and reduce legal risk.

1) Confirm You’re In A Genuine Redundancy Situation

• Write down the business reason (loss of work, restructure, closure, etc.)
• Gather supporting evidence (financials, forecasts, pipeline, org chart changes)

2) Plan The Process And Timelines

• Decide whether this is individual consultation or collective consultation (20+)
• Map consultation meetings and decision points
• Build in time for alternative roles and appeals

3) Identify Pools And Draft Fair Selection Criteria

• Define who is “in scope”
• Avoid subjective criteria and discrimination risks
• Document your scoring approach

4) Start Consultation Early (Before Final Decisions)

• Hold “at risk” meetings
• Share scoring/criteria where appropriate
• Keep notes of feedback and your responses

5) Explore Alternatives And Suitable Roles

• Consider voluntary redundancy, reduced hours, job shares
• Check vacancies and potential redeployment roles

6) Confirm Outcomes In Writing

• Provide written notice (or PILON) in line with contract and statutory rules
• Set out redundancy pay calculations and final pay items
• Offer the right of appeal

One final point: if your redundancy process is happening alongside performance or conduct concerns, it’s important not to mix processes in a way that looks like redundancy is being used to sidestep fairness. If the real issue is poor performance, a structured process (rather than redundancy) is often safer.

Getting these decisions right is much easier when your documentation and expectations are clear from day one - particularly around role duties, notice, and termination rights.

Key Takeaways

• Search interest in Wilko redundancies is a reminder that redundancies can affect any business - SMEs should have a clear, lawful process ready before they’re under pressure.
• A genuine redundancy reason is only half the job; you also need a fair process, including meaningful consultation and careful selection.
• If you propose 20+ redundancies in 90 days or less at one establishment, you’ll likely trigger collective consultation rules and minimum consultation periods.
• Fair selection usually means identifying an appropriate pool and using objective criteria, supported by a documented scoring approach.
• Notice and final pay must be handled carefully, including holiday pay, statutory redundancy pay (if eligible), and using PILON only where your contract allows it.
• Always consider suitable alternative employment and offer an appeal - it can reduce legal risk and help maintain trust during a difficult period.

If you’d like help managing redundancies properly - including consultation planning, letters, redundancy scoring, settlement terms, and risk reduction - you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.