The term “redundancy” is clearly defined under Section 139 of the Employment Rights Act 1996, and any redundancy process must comply with that definition.
Redundancy
Is your selection pool and criteria reasonable, and are you confident you’re not inadvertently discriminating against any employees?
Understanding Redundancy
A redundancy arises when an employer no longer requires or has a reduced need for employees performing specific functions or work.
The regulations outline how employers must consult employees, define selection criteria, and conduct the process fairly. One of the most critical aspects of redundancy is ensuring the selection process is objective and transparent when reducing staff numbers.
Selection Criteria
Employers must clearly define the basis on which selections are made. Common criteria include:
- Skills, qualifications, and aptitude
- Standard of work and performance
- Attendance and disciplinary record
Any selection criteria must be objectively justified and consistently applied.
Notice and Redundancy Pay
Employees selected for redundancy must be given appropriate notice.
The length of this notice depends on how long each employee has been working for the business and ranges from one week to 12 weeks or other such period as set out in the contract of employment.
If an employee is made redundant, they are entitled to a redundancy payment (providing they have at least two years’ service). The amount of the payment will be calculated based upon the salary of the employee, their length of service and their age. It is calculated according to a set formula.
Redundancy dismissals, if not carried out properly, have the potential to lead to claims for unfair dismissal. It is therefore essential for employers considering redundancy dismissals to take advice from an early stage to ensure that errors do not occur and are not compounded by the time notice of termination is given.
How We Can Help
We can guide you through the entire restructure or redundancy process. Our employment solicitors can:
Draft fair and legally compliant selection criteria
Advise on the selection pool
Support you through a meaningful and defensible consultation process
Our goal is to help you protect your business while treating your staff fairly and lawfully.
Why Legal Advice Matters
If a redundancy process is not handled properly, it can lead to unfair dismissal claims.
It’s essential for employers to seek legal advice early to prevent procedural errors and ensure compliance with employment legislation.
Early consultation helps avoid costly mistakes that can escalate once termination notices are issued.