Employment Law considerations for autumn business restructuring

As we move into autumn 2025, many business owners are considering restructuring their companies to adapt to changing market conditions. Whether you’re dealing with economic pressures, implementing new technology, or simply reorganising to improve efficiency, understanding the latest employment law requirements is crucial for any successful restructuring.

Why Autumn Restructuring requires extra care

Autumn has traditionally been a busy period for business restructuring. With the new financial year settling in and winter planning ahead, many companies use this time to make necessary changes. However, the current economic climate, including rising employer National Insurance contributions and inflationary wage increases, is forcing many businesses to reassess their workforce strategies.

Key Point: Any restructuring that might lead to redundancies must be carefully planned, as employment law changes throughout 2025 have made the process more complex and costly.

Major Employment Law changes affecting restructuring in 2025

1. Increased financial obligations

From April 2025, several cost increases came into effect that directly impact restructuring decisions:

• National Living Wage increased to £12.21 per hour (up from £11.44)
• National Minimum Wage for 18-20 year olds rose to £10.00 per hour
• Employer National Insurance contributions increased from 13.8% to 15%
• Statutory redundancy pay cap increased to £719 per week

These increases mean restructuring costs are higher than ever, making thorough planning essential.

2. Enhanced protection against “Fire and Rehire”

From 20 January 2025, where an employer unreasonably fails to comply with the Code of Practice on dismissal and re-engagement, protective awards can be increased by up to 25%. This means employers could face protective awards of up to 112.5 days’ uncapped pay per affected employee.

What this means: If you’re considering changing employee terms and conditions as part of your restructuring, you must follow proper consultation procedures or face significant financial penalties.

The Employment Rights Bill: What’s coming

The Employment Rights Bill is expected to receive Royal Assent in October 2025, with most provisions taking effect in 2026. However, businesses should start preparing now for these significant changes:

Collective redundancy changes

The Bill will remove the “establishment” requirement for collective redundancy consultation, meaning employers will need to count redundancies across all sites when calculating whether the 20+ threshold is met. This will likely increase the number of situations requiring collective consultation.

Practical impact: If you have multiple locations and are planning redundancies, you’ll need better tracking systems to monitor redundancy numbers across your entire business.

Extended consultation periods

The government is considering doubling the minimum consultation period for dismissals of 100 or more employees from 45 to 90 days.

Planning tip: Start your restructuring consultations earlier than you might have previously to accommodate potentially longer timescales.

Day-One Employment Rights

Employees will gain protection from unfair dismissal from their first day of employment, eliminating the current two-year qualifying period.

What this means: Performance management and dismissal processes must be more robust from day one of employment.

Essential steps for Autumn Restructuring

1. Document your business case

Before starting any restructuring, ensure you have:

• Clear business reasons for the changes
• Evidence of financial pressures or operational needs
• Consideration of alternatives to redundancy

2. Plan your consultation process

For fewer than 20 redundancies:

• Individual consultation with each affected employee
• No set minimum timeframe, but must be meaningful

For 20+ redundancies:

• Collective consultation starting at least 30 days before dismissals (20-99 redundancies) or 45 days (100+ redundancies)
• Notification to the Redundancy Payments Service using form HR1

3. Ensure fair selection

Your selection criteria must be:

• Objective and measurable
• Applied consistently
• Free from discrimination
• Properly documented

Avoid: “Last in, first out” is unlikely to be fair unless there’s no other way to choose between employees with identical skill sets and records.

4. Consider alternatives

Before proceeding with redundancies, consider:

• Voluntary redundancy schemes
• Reduced working hours
• Redeployment opportunities
• Temporary layoffs
• Early retirement options

Practical checklist for Autumn Restructuring

Before starting:

• Document business case and alternatives considered
• Calculate redundancy costs using updated rates
• Identify affected employees and selection pools
• Plan consultation timeline
• Prepare for potential collective consultation

During the process:

• Hold meaningful consultations
• Consider employee suggestions seriously
• Apply selection criteria fairly and consistently
• Explore redeployment opportunities
• Keep detailed records

After decisions:

• Provide proper notice periods
• Calculate redundancy payments correctly
• Offer right of appeal
• Support affected employees with job searching

Key considerations for different business zizes

Small Businesses (Under 20 employees at risk)

• Focus on individual consultation
• Consider voluntary arrangements
• Ensure fair selection if multiple employees affected

Medium to Large Businesses (20+ employees at risk)

• Mandatory collective consultation
• HR1 notification requirements
• Consider union or employee representative involvement
• Longer timeframes required

Multi-site operations

• Prepare for changes requiring company-wide redundancy counting
• Implement tracking systems across all locations
• Consider staggered redundancies to manage consultation requirements

Looking ahead: Preparing for 2026 changes

While the Employment Rights Bill’s main provisions won’t take effect until 2026, smart businesses are already preparing by:

• Reviewing and updating employment contracts
• Strengthening performance management processes
• Implementing better tracking systems for redundancies
• Training managers on fair consultation practices

Getting professional help

Employment law is complex and constantly changing. Failing to follow proper procedures can lead to claims for unfair dismissal, discrimination, or breach of contract. Given the increased costs and penalties introduced in 2025, professional legal advice is more valuable than ever.

At Davenport Solicitors, we help businesses navigate restructuring challenges while minimising legal risks and ensuring compliance with the latest employment law requirements.

Key takeaways

1. Start early: Plan restructuring well in advance to accommodate longer consultation periods and complex requirements.
2. Budget carefully: Factor in increased statutory rates and potential penalty costs when calculating restructuring expenses.
3. Document everything: Maintain thorough records throughout the process to defend against potential claims.
4. Consult meaningfully: Engage genuinely with employees and their representatives, considering their suggestions seriously.
5. Stay informed: Keep up with ongoing Employment Rights Bill developments that will affect future restructuring.
6. Seek advice: Given the complexity and increased penalties, professional employment law advice is essential for any significant restructuring.

For expert guidance on employment law and business restructuring, contact Davenport Solicitors. Our experienced employment law team can help you navigate the complexities of autumn restructuring while protecting your business interests.