Being made redundant: what your employer has to get right

RedundancyA dismissal that occurs when your employer no longer needs the work you do, either because the business is closing, a workplace is closing, or the requirement for employees to carry out that kind of w... is not something your employer can do to you however they like, just because the underlying business reason is genuine. There is a process the law requires, and if your employer skipped or rushed it, that matters even when the redundancy itself was real.

What actually counts as a redundancy

Under section 139 of the Employment Rights Act 1996The primary piece of legislation setting out employees rights in the UK, including the right not to be unfairly dismissed, the right to a written statement of employment particulars, and rights relati..., a redundancy exists where your employer has stopped, or is stopping, the business (or that part of it), or needs fewer people to do work of a particular kind. It is a genuine, potentially fair reason for dismissal under section 98(2)(c) of the same Act. But being labelled a redundancy does not settle the matter, and the test for whether the need for a particular kind of work has genuinely gone down is a question of fact, not of what your contract technically permits. Our case study on a redundancy has to be about the job, not the person doing it sets out that test. Our case study on the real reason for your dismissal sets out what happens when the stated reason does not match what actually happened.

Consultation: what you are entitled to before any decision is made

If your employer is proposing to make 20 or more people redundant at one establishmentIn collective redundancy law, your "establishment" usually means your specific workplace, site, or business unit, not the whole company. Whether the 20+ employee threshold for collective consultation ... within a 90-day period, they must collectively consult with a recognised union or elected employee representatives, starting at least 30 days before the first dismissal takes effect (45 days if 100 or more roles are affected), under sections 188 to 198 of the Trade Union and Labour Relations (Consolidation) Act 1992. Getting this wrong can lead to a protective awardCompensation an employment tribunal can order, up to 13 weeks' gross pay per employee, when an employer fails to properly inform or consult staff before a TUPE transfer. of up to 90 days’ pay per affected employee, separate from any unfair dismissalA legal claim you can bring if your employer dismissed you without a fair reason or without following a fair process. You normally need two years of continuous employment to qualify, though some dismi... claim.

Below that threshold, you are still entitled to individual consultationA process your employer is required to carry out before making significant decisions that affect you, most commonly redundancy. It must be genuine, meaning your employer must listen and consider what .... Williams v Compair Maxam sets out what that has to look like in practice: early warning that your role is at risk, a genuine opportunity to comment on the proposed selection criteria, and consideration of whether the redundancy can be avoided altogether.

Fair selection criteria

Where more than one person could be selected for the same redundancy, your employer needs an objective way of choosing between you. Williams v Compair Maxam is the case to know here: criteria have to be capable of being checked. A manager’s private view of who to keep is not enough. If you were never told what criteria were used or how you scored, ask. You are entitled to see this.

Suitable alternative employment

If a suitable role exists elsewhere in the business, your employer should offer it to you before dismissing you for redundancy. But suitable does not mean any role at all. Standard Telephones and Cables Ltd v Yates confirms that a genuine drop in status or skill level can make a role unsuitable for you specifically, even at the same pay. If you are offered an alternative role, you have the right to a four-week trial period to see whether it actually works, without losing your redundancy rights if it does not, under section 138 of the Employment Rights Act 1996.

This is not just a passive obligation on your employer not to hide a vacancy from you. Hendy Group Ltd v Kennedy confirms your employer has an active duty to genuinely help you find alternative work once your role is at risk, not simply point you toward a job advert and leave you to it. Where an employer fails to take that active step, a tribunal can award full compensation with no reduction for the chance you might have been dismissed anyway.

Your employer should also think about whether a more junior role could be adapted for you, sometimes called “bumping”, even if you never raise it yourself. It is not an absolute rule, but it has to be genuinely considered as part of a fair process.

What you are owed

If you have at least two years’ continuous service, you are entitled to statutory redundancy pay, based on your age, length of service, and weekly pay, subject to the statutory cap. Your employer may also offer more than the statutory minimum under its own scheme or your contract. This is separate from any notice pay you are owed.

If your redundancy was not handled fairly

A genuine redundancy with a broken process can still be unfair dismissal. Being made redundant without any process is still unfair dismissal sets out how tribunals treat that gap between the underlying reason and the way it was carried out, including how compensation is assessed differently from fairness itself. Ignoring your appeal against dismissal has been found to make an otherwise fair process unfair too.

If you want to understand how compensation is worked out where a process failure is found, our guide on how compensation can still be reduced even where a dismissal was unfair covers that separately from the fairness question itself.

Not sure where you stand? Our situation guide can help you work out what applies. Or book a call with us directly.