Redundancy

What is Redundancy?

Redundancy is a form of dismissal from your job. It happens when employers need to reduce their workforce because the business requires fewer employees to carry out work of a particular kind.

Unlike other forms of dismissal, it is due to the needs of the business and is not because there is a specific issue with you.

The Law on Redundancy

Under section 98(2)(c) of Employment Rights Act 1996 an employer may fairly dismiss an employee for a reason that relates to the facts that the employee is redundant to the needs of the business. This can happen in the following circumstances:

1. Job Redundancy - Where the business ceases or intends to cease to operate;
2. Place of Work Redundancy - Where the business ceases or intends to cease to operate in the place where an employee was employed;
3. Employee Redundancy - Where the employer no longer needs as many employees;

The Redundancy Test

The test for redundancy is whether the employer requires fewer (or no) workers to do work of a specific kind at a particular location and not just whether the work itself has ceased or diminished.

In considering whether a redundancy situation does or does not exists the tribunal will not be concerned with the fact that the work may still exist, but rather whether the employer decides to have it done.

In addressing whether there is a redundancy situation, the tribunal has to consider the employer’s requirements for someone to do the job the employee was employed to do.

Where the work continues to be done but is shared out between other employees there can still be a redundancy situation, because there will be a need for fewer employees.

A redundancy dismissal can be fair or unfair. However, as long as your employer follows the rules and doesn’t unfairly target you then it is unlikely that a tribunal will find that your redundancy dismissal amounted to an unfair dismissal.

Is my redundancy genuine?

Here are some examples of when a genuine redundancy situation has arisen: -

• The employer has closed down, gone into administration or ceased trading;
• The employer moves its operations to a new location in the country or a new country;
• An employee’s department moves to a new location in the country or a new country;
• The work an employee is distributed to other employees;
• New technology is brought in by the employer, which takes over the employee’s duties.

Do you have redundancy rights?

You have redundancy rights if:

• you're legally classed as an employee;
• you've worked continuously for your employer for 2 years before they make you redundant.

Have you been selected fairly for redundancy?

You must have been chosen fairly.

Among the reasons that are not considered a fair basis for selection:

• Your age or gender
• You are pregnant
• You have been a whistle-blower
• You are a member of a trade union
• You have asked for holiday or maternity leave

Your right to consultation

Employers always have to consult with employees before dismissing them on the grounds of redundancy.

In short, your employer must tell you what’s going on and give you a chance to ask questions and raise objections.

As part of the consultation process, employers have to:

• Consider alternatives to redundancy.
• Look at ways to reduce the numbers of redundancies.
• Look at how they can reduce resulting hardship.

The process your employer has to follow will depend on the number of redundancies planned. Redundancy happens when your job disappears. It is not the same thing as being dismissed from your job for other reasons Your employer must use a fair and objective way of selecting job roles to make redundant, and tell you what it is. If you think you’ve been selected unfairly (say, on the grounds of age, race or gender), or your employer has acted unfairly in other ways, you can normally appeal. If you’re still not satisfied you can take your employer to a tribunal.