Your Legal Rights Relating to Redundancy

Site updated on August 5, 2016

Redundancy is a form of dismissal. Effectively you lose your job because your employer needs fewer people. If you are made redundant, you have a number of rights. If your job still exists, or you are replaced soon after you have left, you may have a claim that you were unfairly dismissed (you need two years service for this).

Your employer may offer you another job. If you think the alternative job is unsuitable, you can turn it down and claim redundancy. You can agree to try the alternative job for four weeks. If the job is not suitable, you can still take the redundancy package at the end of the four week trial period. If you turn down a reasonable offer of another job with your current employer, you may lose your redundancy pay. A longer trial period can be agreed with you, but do get this in writing to safeguard your Redundancy rights if you decide against taking the job after the trial.

Disputes about redundancy, redundancy pay or whether an alternative job is reasonable, can be taken to an employment tribunal.

There are three broad areas where you have certain rights in relation to redundancy. These are;

  1. the right to redundancy pay,
  2. the right to time off to look for alternative employment
  3. the right to be consulted about the redundancies.

Redundancy is carefully defined as one of the following:

1) Your employer has ceased to carry out his business or intends to cease to carry out his business for the purposes of which the employee is employed (ie.your employer is closing down, or closing part of the business you work in).

2) Your employer has ceased, or intends to cease, to carry on that business in the place where the employee was so employed (your employer is moving the business).

3) The requirements of that business for employees to carry out work of a particular kind have ceased or diminished or are expected to do so (your employer needs fewer workers).

4) The requirements of the business for employees to carry out work of a particular kind at a place where they were so employed have ceased or diminished or are expected to do so (your employer needs fewer workers).

If you are dismissed because of redundancy you are entitled to a Statutory redundancy payment if you have two years continuous service under a contract of employment (ie, you are not self-employed or an Agency worker). Your contract may give you more than the Statutory minimum – check this.

Your Employer should try to avoid the need for redundancy by considering the following:

  • natural wastage
  • recruitment freeze
  • stopping or reducing overtime
  • offer early retirement to volunteers (subject to age discrimination issues)
  • retraining or redeployment
  • reviewing fixed term contracts
  • reduce numbers of agency workers
  • offering existing employees sabbaticals and secondments.

Consultation with you should also consider:

  • Why and how you have been selected
  • Possible ways of avoiding the redundancy, taking your views into consideration
  • Possible alternative work, again seeking your views

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