You don't have to be made redundant, you just need to have a formal process with the opportunity of the employee to change. So there's a distinction between a fair dismissal and an unfair one in the UK. For a fair one you must have a dismissal process that was followed, like a verbal warning (employer logs this), written warning, final warning, fired.
You can also dismiss someone if they can no longer do their job, e.g. a driver who loses their licence
Well yes, my point is that there are only 3 ways to "fire" someone in the UK after the initial 2 years, and none of them are what you'd call "at will". If you hired someone and they worked for you over 2 years, then you can't just get rid of them because you fancy it, circumstances have to change either with them or with your company to allow it. The ways are:
1) redundancy - which carries a legal proof of showing that the position is no longer needed, and you are not allowed to hire anyone else for the same or similar position for a length of time
2) end of contract due to performance issues - that is even more lengthy than the redundancy path usually, you have to clearly demonstrate that someone's performance has been inadequate, with a clearly demonstrable metric, but also you need to give the employee a chance to improve. Extra training, "performance improvement plans", at the very least written warnings etc. This process usually takes 6 months at minimum in order to satisfy all the legal bits around it.
3) immediate dismissal due to breaking the law, being caught stealing, driving drunk, destroying company property...this sort of stuff. The employer still has the legal burden of demonstrating that the stuff in question happened, but a police report is usually enough. I suppose something like a driver losing their licence and then literally being unable to do their job falls under this too.
None of the above allow for "you're sick? don't bother coming in tomorrow" scenario. If OP's friend's manager actually did say that, then it's a clear path for a lawsuit for unfair dismissal.
Go bankrupt? Borrow money to pay your staff? Ask various institutions for help? Arrange some kind of deal with your employees where you will pay them later if they agree to wait?
Like, "letting someone go because we ran out of money" is not a valid reason for dismissal.
You can also dismiss someone if they can no longer do their job, e.g. a driver who loses their licence