Redundancy is a potentially fair reason for dismissal. It is
fair to say that in the absence of blatant unfairness and
discrimination an Employment Tribunal is often reluctant to revisit
the decisions made by an employer with regard to redundancy and may
not wish to interfere with a redundancy that appears on the face of
it to be reasonable.
However, some redundancy processes are unfair, and if you think
the procedures leading up to your redundancy were not carried out
fairly, you may have a claim.
What employers should do in redundancy situations
Employers are expected to go through a fair process when making
employees redundant. They should:
- consult representatives and individual employees before
dismissing them. If more than 20 people are being made redundant
the employer has a duty to consult employee representatives. Breach
of this duty entitles affected employees to claim up to 90 days
- properly identify those who are potentially redundant
- adopt fair selection criteria
An employee who is dismissed without any procedure being
followed, and who has one year's service or more can claim unfair
dismissal. No minimum length of time in employment is needed if
it is alleged that the selection for redundancy was for an
automatically unfair reason (e.g. pregnancy).
There are three Redundancy situations:
1. Closure of a business or workplace
In this situation, an employee becomes redundant because either
the business as a whole has closed, or the employer has closed a
particular workplace where the employee was employed (e.g. a branch
Redundancy can be the outcome even if your contract called for
you to work in more than one place and some of the other workplaces
remain open. If you have only ever worked in one place and that
place of work closes, you can be made redundant.
2. Reduction in the size of the workforce (i.e. where the
employer wants fewer employees to do a particular kind of
Employers are allowed to look at the need for fewer employees
across the business as a whole, not just in respect of a particular
department of the company, or particular group of workers
performing a specific type of work. Effectively, this can mean an
employee can be bumped out of their job by another employee who was
doing something else the employer no longer needs them to do.
If a group of employees are selected for redundancy the employer
needs to show:
- what type of work they do
- why the demand has ceased or stopped completely.
If the amount of work has decreased so that only some of the
employees within a group are selected the employer must show how
they picked the unlucky ones.
The selection criteria should not be based on an individual's
view of an employee and cannot be based upon unfair reasons such as
trade union membership or activity. If the selection criteria are
based upon race disability or sex the affected employee can claim
under unfair dismissal or make a claim for discrimination.
Once the criteria have been agreed the employer should apply
them consistently in selecting employees for redundancy.
3. Alternative work
The employer in a redundancy situation can offer the employee
other work as an alternative to redundancy. It is up to the
employee whether to accept or not. However if an employee
unreasonably refuses an offer of a suitable alternative employment
the employer may be able to avoid paying them a redundancy
For the job offered to be truly considered alternative, it must
have similar pay conditions and skill requirements. A refusal will
be looked at from each employee's point of view.
An alternative job offer must be made before the current job
ends and the start date must be no more than 4 weeks after the old
job ends. The first 4 weeks are what is referred to as the trial
period. During this time, or when the 4 weeks have expired, an
employee can still leave the job and claim a redundancy
If this happens, the employer can still argue that the job
offered was suitable alternative employment and may refuse to pay a
redundancy payment. In that event the employee could approach an
Employment Tribunal to decide whether the job was suitable
Was your redundancy fair?
If you need advice because you think your redundancy was not
fair, our employment solicitors may be able to help. Get advice now
- call us on freephone 0800 422 0241 or complete our
contact form and we will get back to you.