The Forecast Turned Red: A Small Co-op’s Guide to Redundancy Without the Theatre

There is a particular kind of silence in a small co-op when the forecast turns red. Someone has run the numbers, someone else has checked them, and everyone in the room already knows what the next sentence is going to be. In a business owned by its members, that silence carries an extra weight. We are supposed to be the good guys. We are supposed to have open books. And now we might have to make people redundant.

This is not a theoretical guide, and it is not legal advice. It is a playbook for the awkward middle ground: how to make a fair redundancy process in a small UK co-op without hiding behind procedure or exposing people who are already having the worst month of their year.

Put the right hats on, then take them off again

The first trap is governance creep. In a co-op, members rightly have a say in strategy, budgets and the big questions. But member governance is not the same as employment management. A general meeting should not be voting on who stays and who goes. That is how you turn a redundancy into a popularity contest with minutes.

Agree the delegation early. The board or members can approve the financial case, the size of the restructure and the budget for redundancy costs. The actual employment decisions should sit with whoever has the delegated authority: a manager, a small panel, or an external HR adviser. In a worker co-op, member-employees should be clear about when they are wearing their member hat and when they are wearing their employee hat. If someone has a conflict, they recuse themselves and it is written down.

That separation protects everyone. It protects departing staff from being judged by people who have only seen a spreadsheet. It protects remaining members from making decisions they are not trained or authorised to make. And it protects the co-op from the very reasonable accusation that open books became open season.

Open the books, not the files

Transparency does not mean publishing someone’s redundancy score in the members’ newsletter. It means being honest about the financial reality while keeping personal information personal.

Share what people actually need to understand: the cashflow forecast, the reserves position, the contracts you have lost, the costs you have already cut, and the options you considered. Be clear about what is still uncertain. If the co-op cannot afford current staffing levels beyond a certain date, say that plainly and say when the decision will be made.

What you do not share is individual selection scores, medical information, disability adjustments, pregnancy or maternity details, or the personal circumstances of anyone at risk. Under UK GDPR, redundancy records are personal data. The open-books principle is about the co-op’s money and decisions, not about turning a colleague’s life into a case study.

A useful rule: members can see the shape of the problem and the fairness of the process. They do not get to see the inside of someone’s HR file.

Consultation is a conversation, not a shield

In a small co-op, redundancy consultation is usually individual rather than collective. Collective consultation rules kick in at 20 or more redundancies, but plenty of small co-ops will never get near that. That does not mean the process can be a five-minute chat after a board meeting.

Meaningful consultation means meeting early enough to change your mind. It means explaining why the role is at risk, not just that it is. It means asking about alternatives: reduced hours, job shares, redeployment, sabbaticals, temporary pay cuts, pausing non-essential projects, or using reserves more deliberately. Some of those ideas will be impractical. Some will come from the person whose job is at risk, and they may be better than anything management has thought of.

Keep a written record of the meeting, but keep it human. Note the date, who was present, the alternatives discussed and any response you promised. Do not write a script that sounds like it was drafted by a committee of lawyers and then read aloud like a weather report. People remember how the conversation felt long after they have forgotten the exact wording of the statutory test.

ACAS guidance is a decent starting point for small employers. It will not make the decision painless, but it will help you avoid the unforced errors that turn a sad situation into a tribunal.

Choose criteria before you choose names

If you have to select roles for redundancy, write the criteria before you look at who does what. Otherwise the criteria will mysteriously start to fit the people you already had in mind.

Use objective, evidence-based criteria: the duties that are genuinely reducing, the skills needed for the work that remains, attendance where relevant and lawful, and performance where it has been properly documented. Two people should score independently. Someone should sense-check the results for bias, pregnancy or maternity discrimination, disability and part-time working. If someone is on maternity leave, you need proper advice before you go anywhere near their role.

Offer a right of appeal to someone who was not part of the original decision. In a small co-op, that might be an external adviser or a board member who has not been involved. It is not a sign of weakness. It is a sign that the process is serious enough to be checked.

Support people out with actual support

A fair redundancy is not just a lawful one. It is one where the person leaving is not left to figure everything out alone.

Pay what you owe: statutory redundancy pay where eligible, notice or pay in lieu, accrued holiday and any contractual sums. Be clear about dates. Provide a reference that does not damn with faint praise. Offer time off for interviews and job hunting. If you have an employee assistance programme, make sure the person knows it is available after they leave, not just while they are still on the payroll. Ask what would help and then, within reason, do it.

If the co-op cannot afford enhanced redundancy pay, say so early. Do not imply there might be more and then quietly disappear. People can handle bad news. They struggle with vagueness.

Record the hard bits without making a spectacle

Minutes should show that the process was fair. They should record the financial context, the alternatives considered, the selection criteria, the panel, any conflicts and recusals, the consultation meetings, the decision and the appeal route. They should not record someone’s medical history or the fact that they once cried in a meeting.

Keep personal redundancy records in a separate confidential file with restricted access. Keep the governance record at the level of principle and process. If members later ask why a decision was made, you can show them the framework without handing round the intimate details of a colleague’s exit.

That is the balance open books asks of us: be transparent about power, money and process, and be discreet about people.

After the decision, keep being a co-op

Redundancy does not end when the leaving date passes. The people who remain will be doing more work, carrying more grief and wondering whether they are next. Say thank you. Acknowledge the loss. Do not announce a restructure and then act as if nothing happened.

Review what you learned in three months. Did you consult early enough? Were the criteria fair? Did the support actually help? Write it down. A co-op that can learn from a hard decision is more trustworthy than one that pretends it never had to make one.

The money may not be there. But the honesty can be. That is the part we get to choose.