Redundancy is a form of dismissal from a job. Reasons for redundancy include:
- New technology or new system has made your job unnecessary
- The job you were hired for no longer exists or the need for the job has been substantially reduced
- The need to cut costs means staff numbers must be reduced
- The business is closing down or moving
- In some instances if someone else's job disappears and they are moved into your job, making you redundant, it can still be a genuine redundancy. This is known as 'bumping', it can however be difficult for your employer to justify as fair.
If you are going to be made redundant, your employer must treat you fairly and there are certain steps they would be expected to follow:
- You must be given as much notice of a possible redundancy situation as possible.
- Your employer must make a fair selection of employees who are liable to be made redundant.
- You should be fully and properly consulted about the redundancy at all stages of the process.
- Your employer must give you the correct amount of notice and any redundancy pay you are entitled to.
- Alternatives to redundancy should be considered by your employer.
An employer must follow the statutory minimum dismissal procedure if there are less than 20 employees being made redundant but if there are 20 or more then the collective consultation procedure applies.
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.
The following categories of employees have no right to a redundancy payment under the Employment Rights Act 1996:
- Members of the Armed Forces.
- House of Lords and House of Commons staff.
- Apprentices whose service ends at the end of the apprenticeship contract.
- Employees at the end of a fixed term contract which was agreed, renewed or extended before 1 October 2002 and lasts at least two years where they have already given written agreement to waive their entitlement to a redundancy payment at the end of the contract. Any waivers inserted into contracts agreed, renewed or extended after 1 October 2002 will not be valid and fixed-term employees will have a right to statutory redundancy payments if they have been continuously employed for two years or more and are made redundant.
- Domestic servants working in a private home who are members of the employer's immediate close family.
- Crown servants or employees in a public office.
- Employees of the Government of an overseas territory.