Redundancy is a Leadership Test in Today’s Hospitality Industry
Redundancy Handling and What It Means for Hospitality HR
Large-scale redundancies are never easy, but the way they are handled often reveals far more about leadership than the decision itself. Across more than three decades working in hospitality organisations across Australia, Europe, the United States, and the United Kingdom, I have seen redundancy processes handled in very different ways.
Last week, the hospitality industry watched an uncomfortable story unfold as news emerged about the collapse of BrewDog and the way hundreds of employees were told they had lost their jobs. Nearly five hundred staff were informed of their redundancy during a short conference call after receiving only twenty-five minutes’ notice. Within fifteen minutes, employees were told that dozens of bars would close, their roles would end immediately, and the business had entered administration. For the employees involved, the experience was deeply distressing and confusing.
The Bigger Shift Behind This Issue
Redundancies are sometimes unavoidable in hospitality. Economic conditions shift, operating costs rise, and organisations occasionally reach a point where restructuring becomes necessary in order to survive. Trade unions quickly described the situation as one of the worst redundancy processes they had witnessed in the sector, while employment lawyers began questioning whether the required consultation processes had been properly followed. The story travelled quickly across the hospitality community, prompting a wider debate about leadership behaviour and organisational responsibility during times of crisis.
The Real Impact on Hospitality Teams
When redundancy decisions are handled poorly, the immediate damage is obvious for the employees who lose their roles. However, the deeper, and often longer-lasting, impact is felt by employees who remain in the organisation after the restructuring. Those individuals watch closely how their colleagues are treated during moments of crisis, and the conclusions they draw can shape organisational culture for years.
If the process appears rushed, impersonal, or unfair, employees begin to question whether the organisation genuinely values its people. Trust can erode quietly but steadily, and engagement often declines as individuals become more cautious about their future. In hospitality environments where teamwork and service culture are essential, that shift in mindset can have real operational consequences.
Where Many Businesses Struggle
In practice, organisations tend to fall into three recognisable patterns when navigating redundancy situations:
Treating redundancy primarily as a legal compliance exercise where the focus is on process rather than people.
Delaying communication until the final moment, leaving employees feeling blindsided and uncertain.
Managing the situation with openness and respect, recognising that these moments are deeply human experiences.
The difference between these approaches rarely comes down to financial reality alone. More often, it reflects the leadership mindset guiding the organisation at the time.
What HR Must Get Right
Leaders who handle these moments well tend to focus on a few practical principles.
Compliance as a Foundation
There is an important legal dimension to large-scale redundancies that organisations must take seriously. Under the Trade Union and Labour Relations (Consolidation) Act 1992, employers must collectively consult with employee representatives when proposing significant job losses. This requirement exists to ensure that employees have an opportunity to understand and respond to proposals before dismissals take place. The consultation timeline depends on the scale of the proposed redundancies:
At least 30 days before the first dismissal where 20 to 99 redundancies are proposed.
At least 45 days before the first dismissal involving 100 or more redundancies.
Failure to meet these requirements can expose organisations to protective awards of up to ninety days’ pay for each affected employee. Under reforms connected to the Employment Rights Act 2025, that exposure may increase further, potentially doubling the financial consequences for organisations that fail to consult properly.
People Experience Beyond Contracts
Legal compliance alone, however, should never be viewed as the benchmark for leadership behaviour. Delivering difficult messages with empathy and respect ensures that employees are treated with dignity. Providing clarity about pay, benefits, and practical next steps does not remove the pain of redundancy, but it ensures that employees leave the organisation with a clearer understanding of why the decision was made.
Transparency Builds Trust
Organisations may technically meet statutory requirements while still damaging their culture and reputation if the process lacks transparency, empathy, or care. Communicating honestly about the pressures facing the business—rather than hiding behind corporate language—is crucial. Giving employees time and space to ask questions and understand what happens next is how transparency builds trust.
Why Hospitality Has More at Stake Than it Thinks
Hospitality businesses depend heavily on trust, relationships, and reputation. When times are good, organisations can speak confidently about culture, values, and employee engagement. When times become difficult, employees look closely at whether those values genuinely guide leadership decisions.
The way employees are treated during difficult moments becomes part of the story people tell about an organisation long after the restructuring is complete. That story links workforce practices directly to brand reputation, and can either strengthen the organisation or quietly undermine its ability to compete for talent.
The Strategic Opportunity for HR Leaders
For leaders across the industry, the BrewDog story is a reminder that difficult decisions are part of business. However, HR has the opportunity to act as a cultural and operational stabiliser. By guiding leadership to communicate with preparation, care, and legal foresight, HR shapes future readiness rather than just reacting to crises. The way decisions are communicated will always shape how leadership is remembered.
In a Nutshell
The BrewDog story highlights that redundancy is not simply a financial decision. It is a leadership moment that shapes how employees experience an organisation and how the industry remembers it.
Key Takeaways for Hospitality HR Leaders
Difficult decisions should always be communicated with honesty and respect.
Legal compliance is essential, but empathy and dignity matter just as much.
Employees who remain will judge leadership by how their colleagues were treated.
Hospitality leaders who plan early gain a lasting advantage.
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