Employees who are dismissed by reason of redundancy may be entitled to a statutory redundancy payment.

There are three main types of redundancy situation:

  1. Business Closure – closure of the business at which the employee was employed.
  2. Workplace closure – closure of a particular workplace where the employee was employed.
  3. Employee – Having a reduced requirement for the employee to carry out work of a particular kind.

Collective consultation

Where there are 20 or more employees being made redundant over a period of 90 days or less, the employer has a duty to inform and consult employee representatives.

Unfair dismissal

Redundancy is a potentially fair reason for dismissal. However, an employee may be able to challenge it if the employer has failed to:

  • identify an appropriate pool for selection
  • consult with individuals in the pool
  • apply objective selection criteria to those in the pool
  • consider suitable alternative employment.

Where an employer is insolvent or refuses to make a redundancy payment, an employee may apply to the Secretary of State for a redundancy payment out of the National Insurance Fund.

Further advice

Our specialist employment lawyers can advise on all aspects of redundancy, business reorganisation and restructure. For a free, no obligation fact finding meeting, complete our online enquiry form or call 0800 915 6037.


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