Redundancy is one of a limited number of potentially fair reasons for dismissal from work. It occurs when your employer needs to reduce their workforce or close a business premises.

If you are dismissed by reason of redundancy, you have certain statutory rights, including entitlement to a redundancy payment.

A store announcing its closure, resulting in redundancy for staff

Why would I need a solicitor when being made redundant?

  • If you suspect it is not actually a redundancy situation
  • If you believe you have been unfairly selected
  • If your employer has not followed the correct procedure
  • If you have been offered a settlement agreement
  • If you have been asked to volunteer for redundancy
  • If you are not sure you are receiving the full redundancy package you are entitled to.

Circumstances of a genuine redundancy

A redundancy is likely to be genuine if:

  • The whole business is closing. The closure can be permanent or temporary.
  • A particular workplace where you are employed is closing or moving location.
  • The job you do has ceased or diminished, or is expected to cease or diminish. This might occur where your employer is having to restructure.

It is unlikely to be a genuine if:

  • Your employer is replacing you (for example because they have found someone who will work for less)
  • The business is transferring ownership and your new employer wants to employ you on different employment terms.

The latter is likely to be a Transfer of Undertakings (TUPE) situation. This is a grey area, so it is important to seek legal advice if it applies to you.

An employer that has not followed a fair procedure

Ideally, your employer’s redundancy process should be set out in your employment handbook or contract.

Your employer should start by trying to see if redundancies can be avoided. This might include:

  • asking employees to volunteer for redundancy or early retirement
  • laying off self-employed contractors
  • reducing or banning overtime
  • offering you alternative work

If they then intend to proceed, they should identify the potential employees to be made redundant. However, they must make sure that they select people fairly.

Timeline for a redundancy process listed in office schedule

To select you because of a protected characteristic, such as your ethnicity, gender, or any other discriminatory factor will not be considered fair.

Potentially fair reasons for selection include your:

  • skills
  • qualifications
  • aptitude
  • performance
  • attendance
  • disciplinary record

Once those eligible have been identified, your employer must consult with them. If they do not, the redundancy is likely to be unfair.

You should be invited to at least one individual meeting with your employer to discuss the situation. If your employer is making more than 20 people redundant, special rules apply that they must comply with.

You should also be given an appropriate notice period. This should be:

  • one week (if you have worked for between one month and two years)
  • a week’s notice for every year you have been employed (if you have worked for between two to 12 years)
  • 12 weeks if you have been employed for more than 12 years

Being offered a settlement or redundancy package

If you have worked for your employer for more than two years, you will also be entitled to a statutory redundancy payment.

There is a specific formula for calculating this based on your age and length of employment.

  • 5 weeks’ pay for each full year of employment after your 41st birthday
  • A week’s pay for each full year of employment after your 22nd birthday
  • Half a week’s pay for each full year of employment up to your 22nd birthday

Employee consulting with a solicitor about her employer's redundancy process

Your length of service is capped at 20 years. Your weekly pay is the average you have earned per week over the 12 weeks before your redundancy notice.

At the time of writing (Spring 2022) weekly pay is capped at £571. The maximum amount of statutory redundancy pay is £17,130.

If you have been offered a settlement, you may need professional advice as to whether this is a genuine redundancy situation or whether the offer meets your redundancy situation.

Seeking professional advice about a redundancy situation

Redundancy is not necessarily straightforward. If you have concerns about any of the above, you should consult with a solicitor.

At Springhouse, our team of experienced employment law solicitors can help guide you through the redundancy process, and ensure you are not being subjected to an unfair dismissal.

To discuss your circumstances in confidence with an expert, get in touch today.

Published in…

Updates: For employers: Redundancies | Settlement agreements | For employees: Redundancy |

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