What is redundancy?
Redundancy is a form of dismissal from your job, caused by your employer needing to reduce the workforce. Reasons could include:
- new technology or a new system has made your job unnecessary
- the job you were hired for no longer exists
- the need to cut costs means staff numbers must be reduced
- the business is closing down or moving
If your employer is making less than 20 employees redundant in one establishment it is an individual consultation.
If your employer is making 20 or more employees redundant in one establishment within a 90 day period it is a collective redundancy.
Collective redundancies generally occur when there is a:
- business or building closure, meaning your employer no longer needs as many employees
- reorganisation or reallocation of work
There is a range of employment law support available to help you cope with redundancy.
Your employment law right to consultation
Employers should always consult with you before making you redundant under employment law. The consultation should aim to provide you with a way to influence the redundancy process. The consultation will normally involve:
- speaking to you directly about why you have been selected
- looking at any alternatives to redundancy
If this doesn’t happen, your redundancy may count as unfair dismissal for employment law purposes.
Collective redundancies and employment law
If your employer is thinking about making collective redundancies they have a duty to consult with the potentially affected employees’ representatives.
If your employer doesn’t consult the representatives, you may be able to make an Employment Tribunal claim for a protective award. This is an award of up to 90 days’ pay.
Redundancy selections and notice periods
Your employer should use a fair and objective way of selecting people to make redundant. This means that it should be evidence based rather than your employer just deciding who they want to make redundant.
Normally your job must have disappeared for your employer to make you redundant. However, it can still be a genuine redundancy if someone moves into your job after their job disappears, making you redundant (called bumping). This can be difficult for your employer to justify as fair.
If your employer bases your redundancy selection on an unfair reason your redundancy will automatically be unfair and you may be able to make a claim to an Employment Tribunal for unfair dismissal under employment law.
Redeployment by your employer
If your employer is making you redundant they should try to offer you suitable alternative employment within their organisation or an associated company. Your employer should consider any alternatives to making your redundant.
You may also have an employment law right to time off for job hunting.
If you are entitled to statutory redundancy pay the calculation is based on:
- how long you have been continuously employed
- your age
- your weekly pay, up to a certain limit
You should check your employment contract to see if your employer offers a more generous redundancy package.