Redundancy Rights UK: Pay, Notice & Fair Process

Overview

Redundancy is a particular form of dismissal. It happens when an employer needs fewer people to do work of a particular kind, or when a workplace closes, or when the business itself ceases trading. The key point is that the dismissal is about the role, not about the person doing it.

If an employer is really unhappy with someone's conduct or performance, that is a different legal route entirely and dressing it up as redundancy can land the employer in a tribunal. In practice, redundancy tends to arise from restructures, mergers, site closures, automation, loss of a major contract or a downturn in demand.

Employees with at least two years of continuous service may qualify for statutory redundancy pay, and all employees, regardless of length of service, are entitled to a fair process. That includes meaningful consultation, fair selection criteria, consideration of suitable alternative employment and the correct notice period. Collective consultation rules apply where twenty or more redundancies are proposed at one establishment within a ninety day window.

Key steps

1. Check whether it is genuinely a redundancy situation. Before anything else, look at whether the role itself is disappearing or being reduced. If the employer simply wants a different person in the same job, that is not redundancy. A genuine redundancy needs a real business reason such as closure, relocation or a reduced need for that type of work.
2. Look at the selection pool and criteria. Employers should identify a sensible pool of employees doing similar work and apply objective, measurable criteria such as skills, qualifications, attendance (excluding protected absences) and disciplinary record. Selection based on pregnancy, age, disability, trade union activity or whistleblowing can make the dismissal automatically unfair.
3. Engage properly with consultation. Individual consultation should be genuine, not a tick-box exercise, and should happen before any final decision is made. Where twenty or more redundancies are proposed within ninety days at one site, collective consultation with recognised representatives is required, with minimum timeframes set out in legislation.
4. Explore suitable alternative employment. Employers are expected to look at whether any other roles in the business, or in an associated company, could be offered. Employees generally have the right to a trial period in a new role without losing their redundancy entitlement if it genuinely is not suitable.
5. Check notice, pay and the final settlement. Statutory notice is a minimum of one week after one month's service, rising by a week for each full year up to twelve weeks. Statutory redundancy pay is calculated using age, length of service (capped) and a weekly pay figure (also capped), so check gov.uk for the current weekly cap before relying on any figure.