Law guide: Workplace

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Redundancy

Redundancy

Contents

Redundancy

If you're going to be made redundant, you should be treated fairly by your employer and there are certain steps they should follow. You may also be entitled to a redundancy payment, provided you have two years of service with your employer.

What is redundancy?

Redundancy is the situation where an employee becomes superfluous or is no longer needed and the employer dismisses that employee. Reasons 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

It can still be a genuine redundancy if someone else's job disappears and they are moved into your job, making you redundant. This is known as 'bumping', but it may be difficult for your employer to justify as fair.

The procedure

In a redundancy situation, the following things should happen:

  • Your employer should select you fairly
  • You should be consulted about the redundancy
  • You should get any redundancy pay you are due, and be given the correct amount of notice
  • Your employer should consider any alternatives to redundancy

Your employer should apply a fair dismissal procedure which complies with the Acas Code of Practice. If they don't, and they don't have a good reason for not complying with the Code, you could get a 25% uplift on an unfair dismissal award from an employment tribunal.

If an employer uses redundancy to cover up the real reason for ending your employment, or if they do not carry out the redundancy procedure properly, it may amount to unfair dismissal. The rights to redundancy payments and collective consultation are claimed separately from unfair dismissal.

Where to get help

Acas offers free, confidential and impartial advice on all employment rights issues.

Your local Citizens Advice Bureau (CAB) can provide free and impartial advice. You can find your local CAB office in the phone book or online.

If you have doubts about the way your employer may have calculated your statutory redundancy pay, you can call the Redundancy Payments Helpline on 0845 1450 004.