Business Change: Restructuring, Redundancy, Mergers and Moving Premises
Guidance on the HR implications of business change for small and mid-sized employers: restructuring, collective redundancy, mergers and acquisitions, and moving premises.
Built for Employers & Their Teams
CIPD Chartered
ERA 2025 Updated
Bolton, Manchester, North WestA workplace restructure is lawful if you can show a genuine business reason, consult properly and select fairly. Write the business case before you name anyone. Twenty or more redundancies at one establishment in 90 days triggers collective consultation: 30 days for 20 to 99, 45 days for 100 or more, plus an HR1 notification to government.
How do I restructure a business legally?
A restructure is a change to how work is organised: roles, reporting lines, teams, locations or hours. It may or may not involve redundancies. The legal risk comes from three places: dismissals, contract changes, and failure to consult.
Step 1: Write the business case before you name anyone
This is the step employers skip, and it is the step a tribunal will ask about first.
A business case that holds up covers:
- 1.What is driving the change. Falling demand, a lost contract, cost pressure, a new operating model, a merger, technology.
- 2.The numbers. Revenue, margin, headcount cost, utilisation, volume trends. Real figures, dated.
- 3.The proposed structure. An organisation chart of the "to be" state, with roles and headcount by role.
- 4.The gap. Which roles go, which are new, which change, which stay the same.
- 5.Alternatives considered and rejected, with reasons. Recruitment freeze, reduced hours, pay restraint, ending contractor spend, voluntary redundancy, redeployment.
- 6.The cost of the change itself, including redundancy pay, notice, holiday, any enhanced terms, and the productivity dip.
- 7.The risks, including the capability you will lose and the effect on the people who remain.
Two rules about the business case. Write it before you decide who goes, and write it so you would be comfortable showing it to the people affected. Both of those are practical drafting disciplines, not legal ones, and both save a great deal of trouble.
Step 2: Check whether it is actually a redundancy
Section 139 of the Employment Rights Act 1996 defines redundancy as a dismissal wholly or mainly attributable to the employer having ceased or intending to cease to carry on the business, or to carry it on in the place where the employee was employed, or to the requirements of the business for employees to carry out work of a particular kind, or work of a particular kind in that place, having ceased or diminished, or being expected to.
Section 139(6) adds that "cease" and "diminish" mean permanently or temporarily and for whatever reason, and section 139(2) treats the business of the employer together with the businesses of associated employers as one, in some circumstances.
If the work still needs doing at the same volume in the same place, and you simply want a different person doing it, that is not a redundancy and should not be labelled one.
Step 3: Decide whether you are changing contracts rather than ending them
Where the restructure changes duties, hours or place of work rather than removing roles, you are in contract change territory. Acas is clear that you must both agree to changes unless a clause in the contract permits the change, and that you must consult a recognised trade union where terms were agreed with it.
Dismissal and re-engagement is a last resort and is regulated. The statutory Code of Practice on Dismissal and Re-engagement came into force on 18 July 2024, requires the employer to treat this as a last resort and to contact Acas for advice before raising the prospect, and allows a tribunal to increase any award by up to 25% where the employer has unreasonably failed to comply.
From 1 January 2027 this gets much harder. The Department for Business and Trade factsheet on fire and rehire confirms that dismissing an employee for refusing a change to core terms becomes automatically unfair, except where a business is in severe financial difficulty and genuinely has no alternative. Core terms are listed as reductions to pay, changes to total hours, reductions to leave entitlement, changes to pensions and specified shift pattern changes. For non-core changes such as location or job role, enhanced protections require meaningful consultation.
If you have a restructure that depends on imposing contract changes, do it properly now rather than later.
Step 4: Define the pool and the criteria
- ●The pool is the group of employees from whom selection will be made. Define it by reference to the work that has reduced, not by reference to who you want to keep. Document why the pool is drawn where it is.
- ●Criteria should be objective and capable of evidence: skills and qualifications, relevant experience, performance against recorded measures, disciplinary record within a stated period, attendance excluding disability-related and pregnancy-related absence.
- ●Avoid criteria that are really proxies for age, disability, part-time status or family leave. Last in, first out as a sole criterion is high risk.
- ●Score at least two assessors and keep the scoring sheets.
Step 5: Consult individually
Even where collective consultation does not apply, individual consultation does. A workable sequence is three meetings: an "at risk" meeting explaining the proposal and the pool, a second meeting covering provisional scores, alternatives and any suggestions the employee has made, and an outcome meeting. Give written outcomes and a right of appeal.
Step 6: Search for alternatives properly
Redeployment is the step that most often converts a claim into a non-event. Circulate vacancies across the whole business, including ones the employee might not think to ask for.
Where you offer suitable alternative employment on different terms, section 138 of the Employment Rights Act 1996 gives a statutory trial period of four weeks beginning with the date the employee starts under the new contract, or a longer written agreed period for retraining. If the employee ends the new contract in that period, they are treated as dismissed on the date the old contract ended, for the original reason.
Step 7: Notice, pay and time off
- ●Notice: section 86 of the Employment Rights Act 1996 sets minimum notice at one week where continuous employment is under two years, one week per year from two to twelve years, and twelve weeks at twelve years or more.
- ●Statutory redundancy pay: per GOV.UK, for employees with at least 2 years' service, half a week's pay per year up to age 22, a week's pay per year from 22, and 1.5 weeks' pay per year from 41, capped at 20 years' service, with a week's pay capped at £751 and a maximum payment of £22,530.
- ●Time off to look for work: section 52 of the Employment Rights Act 1996 gives employees with two or more years' service a right to reasonable paid time off during notice to look for work or arrange training.
The £751 week's pay cap took effect on 6 April 2026 under the Employment Rights (Increase of Limits) Order 2026, which also raised the maximum compensatory award for unfair dismissal from £118,223 to £123,543.
What the market looks like right now
Restructuring is not a fringe activity. CIPD's Spring 2026 Labour Market Outlook, based on 2,049 senior HR professionals and decision-makers surveyed between 23 March and 23 April 2026, found 22% of employers planning to make redundancies in the three months to July 2026, with the net employment balance at a near-record low of +10 and cost management by far the key organisational priority.
ONS put the UK redundancy rate at 3.6 per thousand employees in May 2026, in a release dated 18 August 2026.
And the underlying business picture: the Insolvency Service recorded 1,931 registered company insolvencies in England and Wales in July 2026, 5% lower than the 2,031 in July 2025, comprising 1,497 creditors' voluntary liquidations, 288 compulsory liquidations, 124 administrations and 22 company voluntary arrangements.
When do I have to hold collective redundancy consultation?
This is where the penalties get serious, and where the law changed significantly in April 2026.
The trigger
GOV.UK states that you must follow collective consultation rules if you are making 20 or more employees redundant within any 90-day period at a single establishment. Acas puts the same test as all three of: proposing 20 or more redundancies; at one establishment; within a 90-day period.
Two things employers get wrong:
- ●It is 20 or more proposed dismissals, not 20 job losses. Someone who takes voluntary redundancy or is dismissed and re-engaged on new terms can count.
- ●"Establishment" is the local unit the employees are assigned to, not the company as a whole. Two sites of 15 each are usually two establishments. Get this analysed early, because the consequence of getting it wrong is the protective award below.
The minimum periods
Consultation must begin in good time and in any event:
- ●at least 30 days before the first dismissal takes effect where 20 to 99 redundancies are proposed
- ●at least 45 days before the first dismissal takes effect where 100 or more are proposed
These are minimum periods, not target periods. Consultation also has to be genuine and completed before notices are issued.
What must be discussed
GOV.UK requires employers to provide written details covering the reasons for redundancies, the numbers and categories of employees involved, how you plan to select employees for redundancy, how you will carry out redundancies, and how you will work out redundancy payments. Consultation must cover ways of avoiding the dismissals, reducing the numbers, and mitigating the consequences.
You consult with trade union representatives or elected employee representatives, or with staff directly where there are none.
Notifying government: the HR1
Separately from consulting employees, you must notify the Redundancy Payments Service using the HR1 form, before issuing any individual notice of dismissal, and:
- ●at least 30 days before the first dismissal if there are between 20 and 99 redundancies
- ●at least 45 days before the first dismissal if there are 100 or more
The HR1 is submitted through the GOV.UK online form. GOV.UK is blunt about the consequence: "You can be fined an unlimited amount if you do not notify RPS."
The protective award doubled in April 2026
This is the single most important change in this area in years.
Where an employer fails to collectively consult, a tribunal can make a protective award. Acas confirms that from 6 April 2026 the maximum award is up to 180 days' full pay for each affected employee, and that before 6 April 2026 the maximum was 90 days' pay.
The DBT collective redundancy factsheet confirms the same: the maximum period of the protective award "will be doubled from 90 to 180 days' pay".
For a business proposing 25 redundancies, the theoretical maximum exposure for a consultation failure has gone from roughly three months' pay per person to roughly six months' pay per person, across everyone affected. That is often a larger number than the entire cost of the redundancy programme.
A change on the horizon: the organisation-wide threshold
The DBT factsheet also confirms that the Employment Rights Act 2025 introduces an additional organisation-wide threshold for collective redundancy obligations, applying "in addition to the current threshold of 20 proposed dismissals at one establishment". The government consulted on that threshold in Make Work Pay: threshold for triggering collective redundancy obligations, with commencement expected in 2027.
The practical effect, once in force, is that an employer making a handful of redundancies at each of several sites may be caught even though no single site reaches 20. If you operate across multiple locations, this is the change to plan for.
A collective redundancy timeline
| When | What happens |
|---|---|
| Day minus 60 or earlier | Business case written and signed off. Establishment analysis done. Numbers confirmed. |
| Day minus 50 | Invite employees to elect representatives if none exist. Allow time for the election. |
| Day minus 45 | Representatives elected and briefed. |
| Day minus 45 or minus 30 | Consultation opens with the written section 188 information. HR1 submitted to the Redundancy Payments Service. Clock starts. |
| Consultation period | Meetings on avoiding dismissals, reducing numbers and mitigating consequences. Respond in writing to proposals. Run individual consultation in parallel. |
| End of minimum period | Consultation concluded. Selection completed. Outcomes issued in writing with right of appeal. |
| After notices | Notice periods run. Redeployment and trial periods. Time off to look for work. |
| Leaving date | Final pay, redundancy pay, accrued holiday, references. |
Build slack into this. The minimum period is the floor, and a consultation that visibly ends the day the clock runs out looks like a countdown rather than a conversation.
What happens to employees in a merger or acquisition?
The first question in every deal is the same, and the answer changes everything: is this a share sale or an asset sale?
Share sale
The buyer acquires the shares in the company. The employing entity does not change. Contracts continue unchanged, continuity is unaffected, and TUPE does not apply. Acas confirms that TUPE is not likely to apply if it is a transfer of shares or equipment only.
That does not mean there is nothing to do. The buyer inherits every employment liability sitting inside the company: unequal pay, misclassified contractors, unpaid holiday, live grievances, discrimination exposure. Those are addressed through due diligence, warranties, indemnities and price.
Asset or business sale
The buyer acquires the business or part of it as a going concern. TUPE applies. Employees assigned to the transferring part move automatically with their terms and continuous service, under regulation 4 of TUPE 2006, and both employers carry inform and consult duties under regulation 13. The seller must provide employee liability information at least 28 days before the transfer under regulation 11, and failure to inform and consult carries compensation of up to 13 weeks' pay per affected employee under regulation 16(3).
Our TUPE guide for employers covers the whole process, including payroll mechanics, pensions and the timeline.
How common is this?
More common than most owner-managers assume. ONS recorded 352 mergers and acquisitions involving a change in majority share ownership in the UK in January to March 2026: 117 domestic deals worth £1.5 billion, 163 inward acquisitions worth £14.2 billion, and 72 outward acquisitions worth £4.7 billion. The bulletin was released on 2 June 2026.
The people workstream in a deal
Whichever structure the deal takes, run these in parallel with the commercial work:
- 1.Employment due diligence. Contracts and written statements, actual versus contractual terms, incentive and bonus arrangements, pension arrangements and contribution rates, holiday balances and how holiday is calculated, live and recent disciplinaries and grievances, tribunal claims and threatened claims, restrictive covenants, contractor and agency arrangements, right to work records, collective agreements and union recognition.
- 2.Key people. Identify who must stay for the deal to work and put retention in place before rumours start.
- 3.The communications plan. Decide what is said, by whom, on what day, to employees, customers and suppliers. Rumours fill any gap you leave.
- 4.Day one readiness. Payroll, pensions, benefits, IT access, contact points, a named person for questions.
- 5.Integration, done later. Do not promise harmonisation you cannot legally deliver. On an asset sale, regulation 4(4) of TUPE makes a variation void if the sole or principal reason is the transfer, even with the employee's agreement.
- 6.Post-deal restructure, if needed. If you plan one, plan it as a proper process with a genuine business reason, real consultation and objective selection. On a TUPE transfer, that means an economic, technical or organisational reason entailing changes in the workforce under regulation 7(2).
Why the 2027 changes matter for deals
Acas confirms that from 1 January 2027, employees will be able to claim unfair dismissal after 6 months in a job instead of 2 years, and the cap on unfair dismissal compensation will be removed. Post-acquisition restructures typically happen within the first year, precisely the window in which a much larger group of employees will be able to bring an ordinary unfair dismissal claim. Deal models built on an assumption of cheap post-completion headcount reduction need revisiting.
What do I have to do legally when moving offices?
An office move looks operational and turns out to be an employment law event, because place of work is a contractual term.
The contract question
GOV.UK confirms that the principal statement, which must be given on the first day of employment, has to state where the employee will be working, and, if they work in different places, where those are and what the employer's address is.
So, three possible positions:
- 1.The contract names a specific site with no mobility clause. A move is a change to a contractual term. You need agreement, or you are potentially in redundancy or dismissal-and-re-engagement territory.
- 2.The contract contains a mobility clause. You may be able to require the move, but a mobility clause must be exercised reasonably and with reasonable notice. Enforcing a clause to move someone 40 miles with two weeks' notice is how employers lose constructive dismissal claims.
- 3.The contract is genuinely multi-site or mobile. Fewest problems, but you still need to consult about the practical impact.
When a move becomes a redundancy
Section 139 of the Employment Rights Act 1996 includes ceasing to carry on the business "in the place where the employee was so employed", and requirements for employees to carry out work of a particular kind "in the place where the employee was employed" having ceased or diminished. A site closure can therefore be a redundancy situation even where the same work continues elsewhere.
If you offer the employee a role at the new site, that is an offer of suitable alternative employment, and the four-week statutory trial period under section 138 applies where the terms differ. Whether the offer is "suitable" and whether a refusal is "unreasonable" turns on distance, journey time, cost, hours and personal circumstances, and is assessed individually.
Where TUPE can bite
Most office moves are not TUPE events. But if the move coincides with outsourcing a function such as facilities, catering, security or IT support, that can be a service provision change under regulation 3(1)(b) of TUPE 2006. And note that regulation 7(3A) and regulation 4(5A) both provide that "changes in the workforce" includes a change to the place where employees are employed, which is significant if you are combining a transfer with a site consolidation.
The health, safety and premises obligations
The Workplace (Health, Safety and Welfare) Regulations 1992 apply to the new premises from day one. HSE guidance states that the minimum temperature in an indoor workplace should normally be at least 16°C, or 13°C if much of the work involves rigorous physical effort, and notes there is no meaningful legal maximum because in many workplaces high temperatures are created by the work activity itself.
Before anyone works in the new building, complete: a general risk assessment, a fire risk assessment and evacuation plan, display screen equipment assessments for workstations, first aid provision and appointed persons, accessibility and reasonable adjustments for disabled employees, and welfare facilities.
The administrative notifications
- ●Companies House. GOV.UK confirms you must tell Companies House if you want to change your company's registered office address, and that the new address must be in the same UK jurisdiction where the company was incorporated. The same page requires notification within 14 days of changes to directors or their details, to people with significant control, and to the address where you keep your records, and within a month if you issue more shares.
- ●HMRC. GOV.UK states that you must tell HMRC if you change your name, business name, or personal or trading address, and that for VAT registration details you must tell HMRC of changes within 30 days.
- ●Also update: your insurers, your lease and business rates position, your payroll and pension provider records, your written statements of employment particulars, and your right to work and GDPR records of processing.
Consulting on the move
There is no standalone statutory consultation process for an office move unless it triggers redundancy or TUPE obligations, but there is every practical reason to consult early:
- 1.Announce early, with the reasons and the proposed date.
- 2.Survey the impact. Journey time and cost, caring responsibilities, accessibility, parking, public transport.
- 3.Meet anyone significantly affected individually. A 25-minute change for most people is a two-hour change for someone.
- 4.Consider mitigations. A travel allowance for a defined period, adjusted start times, hybrid arrangements, a phased move, a season ticket loan.
- 5.Handle flexible working requests properly. A move commonly generates a wave of them. Flexible working is a day-one right, an employee may make two statutory requests in any 12-month period, and every request including any appeal must be decided within two months. You must consult the employee before refusing, and you can only refuse for one of eight statutory business reasons.
- 6.Confirm the outcome in writing and update written statements.
Hybrid working changes the calculation here. ONS found that 28% of working adults in Great Britain hybrid worked in the period 8 January to 30 March 2025. For a good proportion of your workforce, the question is not only where the office is but how often they need to be in it, and answering that clearly usually removes most of the objection.
What is changing in 2026 and 2027 that affects business change?
All dates below are from Acas's Employment Rights Act 2025 page and the DBT factsheets linked above.
Already in force, 6 April 2026
- ●Maximum protective award for failure to collectively consult doubled from 90 to 180 days' pay.
- ●Week's pay cap rose to £751; maximum statutory redundancy payment £22,530; unfair dismissal compensatory award cap £123,543.
- ●Statutory sick pay payable from day one with the earnings threshold removed; paternity leave and ordinary parental leave became day-one rights.
1 October 2026
- ●Employment tribunal time limits for most claims increase from 3 months minus 1 day to 6 months minus 1 day, where the time limit starts on or after that date, per Acas.
1 January 2027
- ●Unfair dismissal becomes a right after 6 months of service instead of two years, and the cap on unfair dismissal compensation is removed.
- ●Dismissal and rehire becomes automatically unfair in most cases, with the core terms listed in the DBT factsheet.
Expected 2027, date not yet set
- ●An additional organisation-wide threshold for collective redundancy consultation, alongside the existing 20-at-one-establishment test, following the government's consultation.
- ●Flexible working refusals must state the business reason and explain why the refusal is reasonable.
What to do about it before the end of 2026
- 1.Do the contract tidy-up now. Mobility clauses, place of work, flexibility clauses, hours. After January 2027 changing core terms by dismissal and re-engagement is effectively closed off.
- 2.Re-run your establishment analysis. If you operate from more than one site, model what an organisation-wide threshold would mean for the restructures you have in mind.
- 3.Lengthen your document retention. Six-month tribunal limits mean investigation notes, scoring sheets, consultation records and decision letters need to be findable for longer.
- 4.Train your managers in consultation. The gap between "telling people" and "consulting people" is the gap between a clean restructure and a protective award.
- 5.Budget honestly. A restructure priced without redundancy pay, notice, holiday, legal support and the productivity dip is not a plan, it is a hope.
CIPD's Winter 2025/26 Labour Market Outlook, surveying 2,082 senior HR professionals and decision-makers between 18 December 2025 and 17 January 2026, found 74% of employers expected their employment costs to increase and 55% expected workplace conflict to increase, with a net employment balance of +7 and 37% saying they planned to hire fewer permanent staff. Preparation is what separates the employers who absorb this from the employers who are surprised by it.
Frequently Asked Questions
Get the plan right before you start
Business change goes wrong in the first fortnight, not the last one. DaisyHR supports employers in Bolton, Greater Manchester and across the North West through restructures, collective consultations, acquisitions and relocations: building the business case, running the consultation, drafting the paperwork and keeping the people who are staying.
Related: TUPE transfers | day-to-day HR guidance for managers
Compiled by Samantha Boyle MCIPD — Fractional HR Director, Bolton & North West. CIPD Chartered (Level 7). · Last reviewed: 15 September 2026