Redundancy
All employers need to have a consultation period to avoid an employment law claim. This period is for you to consult with the affected employees about the redundancy scenario. For employers making over 20 employees redundant there are statutory rules about the length and type of consultation. The consultation period for redundancy should be commenced at an early stage.
Some employers seem to think that consultation is a waste of time. It shouldn't be: you can use this period to properly consider alternatives to compulsory redundancy. The fewer the number of compulsory redundancies the less of an effect it will have on the remaining staff. You could consider alternative roles for some employees - a different place of work or re-training. If you offer an employee an alternative role, he or she is entitled to a 4 week trial period in the new job (which can be extended to 3 months by mutual agreement). You can also discuss the possibility of job sharing or reduced hours, although this must be by agreement with the employee. Alternatively, you can consider if you could cut costs in other ways, such as a recruitment freeze or offering unpaid sabbaticals. In addition voluntary redundancy and early retirement could be considered.
If, following the consultation, you still need to make compulsory redundancies then you need to follow an appropriate dismissal procedure by having a good understanding of employment law.