Redundancy
Redundancy processes that are fair, documented, and defensible.
Redundancy is one of the most significant processes an employer can go through. Done correctly, it is fair to the employee and protects the business. Done incorrectly, it becomes an expensive and stressful tribunal claim.
Before You Set Off
Picking Up the Pace
Maintain Momentum
Shifting Up a Gear
Bumps in the Road
Changing Direction
The legal requirements
For a redundancy to be legally sound, there must be a genuine redundancy situation. You cannot use redundancy as a cover for getting rid of an employee you want to dismiss for another reason. If the real reason for the dismissal was conduct or performance, a redundancy process is not the right route.
The selection process must be fair and not discriminatory. If you are selecting from a pool, the criteria used must be objective and capable of being evidenced. Scores must be documented and evidenced.
Consultation must be meaningful. For individual redundancies, there is no minimum consultation period, but the employee must have a genuine opportunity to put forward alternatives before a decision is made. If putting 20+ employees at risk within a 90-day period longer, statutory, consultation periods apply alongside the requirement to collectively consult.
Statutory redundancy pay
Employees with two or more years of continuous service are entitled to a statutory redundancy payment, calculated based on age, length of service, and weekly pay. The calculation uses a formula: half a week's pay for each year of service under 22, one week's pay for each year between 22 and 40, and one and a half week's pay for each year over 41, up to a maximum of 20 years and a weekly pay cap.
We calculate statutory redundancy pay for all clients and make sure the right amount is paid at the right time.
Alternatives to redundancy
Before making a final decision, you must consider whether there are alternatives to redundancy: redeployment into a different role, reduced hours, a pay freeze, or voluntary redundancy. You do not have to offer every possible alternative, but you must be able to show that you considered them.
We help you work through the options in a way that is genuine and documented.
What is redundancy?
Redundancy is a specific legal reason for dismissal that arises when a particular role is no longer needed, or when the business itself is closing or relocating. It is distinct from dismissal for performance or conduct. The employee has not done anything wrong. The role they were employed to do no longer exists.
Redundancy carries specific legal requirements: a genuine redundancy situation, a fair selection process, meaningful consultation with the employee, consideration of alternatives, and correct notice and pay.
Common Questions
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