Redundancy

Dismissing someone because the job has gone, not because of the person. A process, and it has to be followed.

What it means

Redundancy arises where a business closes, a workplace closes, or the need for employees to do work of a particular kind has diminished.

It is a form of dismissal, which means it must be fair in both reason and process, and employees with two years' service can claim unfair dismissal if it is not.

Why it matters

Most successful unfair dismissal claims arising from redundancy are about process, not about whether the redundancy was genuine.

The costs of getting it wrong are compensation, legal fees and the effect on everyone who stays and watched it happen.

What it looks like in practice

The process: identify a genuine redundancy situation, define the selection pool, use objective selection criteria, consult individually and meaningfully before any decision, consider suitable alternative employment, and give the right to appeal.

Statutory redundancy pay applies after two years' service, based on age, length of service and weekly pay up to a cap.

Collective consultation obligations start at twenty or more proposed redundancies at one establishment within ninety days, with statutory minimum periods.

What to watch out for

Deciding first and consulting afterwards. Consultation has to be capable of changing the outcome or it is not consultation.

Selection criteria that are subjective or that disadvantage a protected group.

Using redundancy to remove a performance problem. That is a different process and dressing it up as redundancy usually fails.

Where to get proper advice

ACAS guidance is free and thorough, and their helpline is free. An employment solicitor before starting if more than a couple of people are affected — settlement agreements need independent advice for the employee anyway.