Practice Area
Redundancy & Restructuring
Redundancy occurs when an employer needs to reduce the workforce because the need for employees to carry out work has ceased or diminished. It's a common feature of modern employment, but redundancy procedures are tightly regulated by employment law.
For employees, redundancy can be devastating. But if you've been selected for redundancy, you have legal rights: the right to fair consultation, the right to challenge the redundancy decision, and the right to statutory redundancy payments and other compensation.
For employers, redundancy must be handled carefully. Unfair redundancy procedures can expose the employer to expensive claims. A well-managed redundancy protects the employer, treats employees fairly, and meets legal requirements.
I advise employees on their redundancy rights and options. I advise employers on fair, compliant redundancy processes. My focus is on fair dealing, clear communication, and legal compliance.
How I can help
I advise employers on fair, compliant redundancy procedures under the Employment Rights Act 1996
I help draft consultation documents, selection criteria, and ensure genuine consultation with employees
I advise on statutory redundancy payments, enhanced packages, and settlement negotiations
I advise employees on their redundancy rights, fair selection, and grounds for challenging unfair redundancies
I identify procedural failures and selection issues that strengthen claims of unfair dismissal
I advise on discrimination grounds (age, sex, disability) that may underlie redundancy decisions
I help employees negotiate better redundancy terms and understand the full value of their claims
I advise on collective redundancy procedures, consultation requirements, and notification obligations
What Constitutes Redundancy
Under the Employment Rights Act 1996, redundancy occurs when an employee is dismissed because the employer's need for employees to carry out work has ceased or diminished, whether temporarily or permanently, or because the employer has reorganised the business and the employee cannot be re-deployed.
Common redundancy scenarios include: business closure, office relocation where the employee cannot relocate, technological change making a role obsolete, restructuring that merges roles, or business downturn requiring workforce reduction. The key test is whether the employer genuinely needs fewer employees, not whether the employer merely wants to save costs by replacing experienced staff with cheaper alternatives.
A redundancy is a potentially fair reason for dismissal under the ERA 1996, but only if the employer follows a fair procedure. Even a genuine redundancy becomes an unfair dismissal if the employer fails to consult, fails to follow fair selection procedures, or fails to consider alternative employment within the organisation.
It's important to distinguish between redundancy and other dismissals. If an employee is dismissed for poor performance or misconduct, this is not redundancy even if the employer replaces the employee with someone else. Redundancy is about the job ceasing to exist, not about the employee's conduct or capability.
Fair Redundancy Procedures
The Employment Rights Act 1996 and the ACAS Code of Practice on Disciplinary and Grievance Procedures set out how redundancy should be handled. The key principles are: fair warning and consultation, fair selection, consideration of alternatives, and fair notification.
First, the employer should inform affected employees of the redundancy situation as soon as possible. They should explain the business reasons, the likely number of redundancies, the timescale, and the process that will be followed. There should be a genuine consultation period (ideally several weeks) allowing employees to ask questions, raise concerns, and suggest alternatives.
Second, the employer must be transparent about the selection criteria. If selecting by last-in-first-out (LIFO), voluntary redundancy, or performance-based criteria, these should be clearly communicated in advance. The selection process should be applied consistently and fairly. If only certain employees are selected, the employer must be able to justify why others were retained.
Third, the employer should genuinely consider whether there are alternative positions within the organisation. If there are, the employee should be offered retraining or redeployment. Failure to consider alternatives is a common procedural failing.
Finally, the employer must clearly communicate the redundancy decision, any redundancy payment, and the employee's notice period or payment in lieu of notice. The employee should have the right to appeal the redundancy decision.
Breaching these procedures can make the redundancy unfair, even if it was genuinely necessary.
Redundancy Payments and Statutory Rights
If an employee is made redundant with notice, they're entitled to statutory redundancy pay under the Employment Rights Act 1996. The calculation is based on age, length of service, and gross weekly pay (subject to a statutory maximum per week and in total). An employee with 22 years' service, for example, receives 1.5 weeks' pay for each year of service, up to the statutory maximum.
Importantly, an employee made redundant must receive their contractual notice period (or payment in lieu). They're also entitled to statutory notice: one week if they've been employed for at least one month, two weeks if for two years, and longer notice in some collective agreements.
During notice, an employee made redundant has the statutory right to take reasonable paid time off to look for work or arrange retraining. The employer cannot usually deny this right.
Beyond statutory redundancy pay, employees sometimes negotiate enhanced redundancy pay during settlement negotiations. This is common in voluntary redundancy schemes or where the employer wants to expedite the redundancy process.
An important right is the "bumped redundancy" scenario: if an employee is made redundant but the employer then recruits someone else into a similar role, the tribunal may question whether the redundancy was genuine. This can lead to unfair dismissal claims.
Collective Redundancy Requirements
When an employer is proposing to dismiss 20 or more employees as redundant within a 90-day period, special rules apply under the Trade Union and Labour Relations (Consolidation) Act 1992. The employer must: provide detailed information to affected employees and their representatives, consult for a minimum period (30 days if 20-99 dismissals, 45 days if 100+), notify the Secretary of State, and give specific notices setting out the legal position.
Collective redundancy has specific legal procedures, and employers often struggle with these requirements. Failure to follow them can result in claims for breach of the consultation requirements, and in some cases, protective awards (compensation equivalent to wages for the period the employer failed to consult properly).
Even if the collective redundancy threshold isn't reached (i.e., fewer than 20 dismissals), employers should still follow fair consultation procedures, as set out in the ACAS Code. The law expects genuine consultation, not merely going through the motions.
Challenging Redundancy Decisions
If an employee believes they've been unfairly selected for redundancy, they can claim unfair dismissal at the tribunal. The tribunal will examine: whether the redundancy was genuine, whether fair procedures were followed, whether the selection was fair, and whether the employee was fairly notified.
Common grounds for challenging a redundancy include: the redundancy was not genuine (it was a pretext for dismissal), the selection criteria were not fairly applied, the employer failed to consult or failed to consider alternative employment, the employer has recruited into a similar role shortly after dismissal, and discrimination in the selection process (e.g., selecting older workers or those with disabilities).
Demographic evidence is powerful in challenging redundancy. If all employees selected for redundancy are over 50, or all are women, this may indicate age or sex discrimination even if the employer claims the selection was objective.
If you believe you've been unfairly selected for redundancy, it's important to act quickly and gather evidence. Written records of meetings, copies of selection criteria, information about employees in similar roles who were retained, and evidence of the employer's stated business need (or lack thereof) are all relevant.
My Approach to Redundancy
When I advise employers on redundancy, I start by ensuring the redundancy is genuine and that fair procedures are followed. I help draft consultation documents, selection criteria, and redundancy notifications. I advise on statutory redundancy calculations and enhanced redundancy packages if the employer is offering them.
For larger redundancies, I advise on collective redundancy procedures, notification to the Secretary of State, and consultation timeframes. I also help the employer anticipate potential claims, identify weak points in the process, and address them before they become tribunal claims.
When I advise employees facing redundancy, I explain their rights: the right to consultation, fair selection, redundancy pay, notice, and the right to challenge the redundancy if it's unfair. I help them understand whether they have grounds to challenge the redundancy, and what compensation they might obtain if they pursue a claim.
I advise on whether accepting a redundancy settlement is wise, or whether challenging the redundancy would be more beneficial. I also help employees negotiate improved redundancy terms if they're willing to accept the redundancy without pursuing a tribunal claim.
Practical Guidance for Employers and Employees
For employers, the key to fair redundancy is: genuine business need, clear communication, fair selection criteria consistently applied, adequate consultation time, consideration of alternatives, and fair notice and redundancy payments. Document everything—the business case for redundancy, the selection process, meeting notes, and feedback given to employees.
For employees, if you're made redundant, ask questions: Why is the role redundant? How was the selection made? Are there alternative positions available? Did the employer consult fairly? If you believe the redundancy is unfair, keep records of everything, seek legal advice quickly, and make any formal challenge (appeal or tribunal claim) within the relevant timescales.
Understand that you're entitled to statutory redundancy pay (usually several weeks' pay depending on age and service), plus notice or payment in lieu of notice. Don't accept a settlement agreement for less than this without understanding what you're giving up. Many employees accept poor redundancy settlements without realising they're entitled to more.
Finally, if you're made redundant, remember that you'll want a reference from your employer for your next role. Consider whether challenging the redundancy is worth the potentially damaged relationship with your employer. Sometimes accepting a good settlement and moving on is the wiser choice.
Frequently Asked Questions
Am I entitled to redundancy pay if I'm made redundant?▾
Yes, if you've been employed for at least two years and are made redundant. The statutory redundancy pay is calculated based on your age, length of service, and gross weekly pay. Broadly: up to age 22, you receive 0.5 weeks' pay per year of service; age 22-40, you receive 1 week's pay per year; age 41+, you receive 1.5 weeks' pay per year. There are statutory caps on weekly pay (currently around £600 per week) and total redundancy pay. An employee aged 50 with 20 years' service, for example, might receive around 20 weeks' pay. Some employers offer enhanced redundancy pay beyond the statutory entitlement.
What if I'm made redundant but the employer recruits someone else into a similar role shortly after?▾
This is "bumped redundancy" and suggests the redundancy may not have been genuine. If the employer dismisses you as redundant but then recruits someone into the same or similar role weeks or months later, the tribunal may question whether the job truly ceased to exist. This could mean your redundancy was not genuine, making it an unfair dismissal rather than a fair redundancy. You may be able to claim unfair dismissal compensation (which can be higher than statutory redundancy pay). This is why keeping records and comparing your situation to others in the department is important.
Can I be selected for redundancy based on my age or other protected characteristic?▾
No. If selection for redundancy is based on age, gender, race, disability, or other protected characteristic, this is discrimination and unlawful. The selection criteria must be objective and applied fairly. If all employees selected for redundancy are aged over 50, or all are women, this may suggest age or sex discrimination. If you believe you've been selected based on a protected characteristic, you can claim discrimination at the tribunal in addition to unfair dismissal claims. Statistical evidence showing a pattern (e.g., that younger employees were retained while older employees were selected) can be very powerful in proving discrimination.
What is my right to notice if I'm made redundant?▾
You're entitled to statutory notice: one week if you've been employed for at least one month, two weeks for most roles. Your contract may specify longer notice. The employer can either work the notice period with you, or pay you in lieu of notice (payment covering the notice period). During notice, you have the statutory right to take reasonable paid time off to look for work or arrange retraining. The employer cannot usually deny this right, so you should be able to attend job interviews and training during your notice period without loss of pay.
What should I do if I'm told my role is redundant but I suspect it's unfair?▾
Ask detailed questions: Why is the role redundant? How was the decision made? How was I selected? Are there alternative roles? Was I consulted fairly? Request copies of any selection criteria, consultation documents, and information about how others were treated. If you believe the redundancy is unfair, you should raise this formally with your employer (in writing if possible). You can also contact ACAS for early conciliation, which may lead to settlement negotiations. Document everything—emails, meeting notes, information you're given about the redundancy. If the employer won't budge and you believe you have a strong claim, you can pursue an unfair dismissal claim at the tribunal.
Can I negotiate better redundancy terms?▾
Yes. Statutory redundancy pay is the minimum. Many employers offer enhanced redundancy packages, particularly in voluntary redundancy schemes or when trying to expedite a reduction in force. If you're being made redundant and the employer's offer seems low, you can negotiate. Point out your length of service, the difficulty of finding alternative work in your field, your age (if relevant), and any other relevant factors. The employer may offer a settlement agreement including enhanced redundancy pay, a positive reference, or extended benefits. Negotiation is often successful if you approach it professionally and reasonably.
What happens to my pension and benefits if I'm made redundant?▾
This depends on your contract and scheme rules. Your accrued pension rights are protected—you cannot lose benefits you've already earned. However, the employer may stop making contributions to your pension from the date of redundancy. Some employers maintain health insurance or other benefits for a transition period; others cease them immediately. These issues should be addressed in the redundancy notification or settlement agreement. Always ask about the position regarding your pension and benefits before accepting a redundancy—it can be a significant issue.
What is a "bumped" redundancy?▾
Bumped redundancy occurs when the employer makes one employee redundant to create a position for another employee. For example, if the employer restructures and one team's role changes, the employer might make the existing employee redundant and recruit someone else into the new role. If this occurs, the tribunal may question whether the redundancy was genuine. If the tribunal finds the redundancy was not genuine—that the job didn't truly cease to exist but was simply restructured—the dismissal may be unfair. This is why employers must be careful when making redundancies; if they recruit into similar roles shortly after, they'll be questioned about whether the redundancy was genuine.
If you're implementing a redundancy or facing redundancy, contact me for expert guidance. Employers: I'll ensure fair procedures and legal compliance. Employees: I'll advise on your rights, fair value, and whether to challenge the redundancy.
Get in touch for a no-obligation initial conversation about your matter.
Other areas of my practice
Unfair Dismissal
Expert advice on challenging wrongful or unfair dismissals and understanding your rights under the Employment Rights Act 1996. I help employees secure fair compensation and employers ensure lawful procedures.
Discrimination & Harassment
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Settlement Agreements
Expert negotiation and advice on settlement agreements to resolve employment disputes confidentially and efficiently. Protect your interests with careful legal review.
Employment Contracts & Policies
Expert drafting and review of employment contracts and workplace policies to protect both employers and employees. Ensure compliance with employment law.
Whistleblowing
Protection for employees who make protected disclosures about unlawful conduct. Expert advice on your rights and how to raise concerns safely.