Important Information on Redundancy Law

The commercial team at Hattons often deal with businesses who find themselves in the unfortunate circumstance of having to make employees redundant.

It can be an extremely stressful time when the jobs of some or all of your employees become redundant. This could be because your business stops operating, relocates or employees carry out work that is no longer necessary, for example, due to the introduction of new technology.

If this happens, you must not only follow a fair redundancy dismissal procedure, but also consult and keep the affected employees, and possibly their representatives informed.

Below we have given further information about redundancy.

What is redundancy?

Redundancy is when you dismiss someone because:

  • you have ceased – or intend to cease – carrying on the business for the purposes of which the employee is employed
  • you have ceased – or intend to cease – to carry on the business in the place where the employee is employed
  • you no longer require the employee to carry out work of a particular kind because the work has ceased or diminished (or is expected to cease or diminish)
  • you no longer require the employee to carry out work of a particular kind because the work in the place where they were employed has ceased or diminished (or is expected to cease or diminish)

For a redundancy to be genuine, the job that the employee does must disappear, i.e. you can still take on new staff but not to do the work the redundant employee was doing.

In this situation, eligible employees would be entitled to receive a statutory redundancy payment (SRP).

How do I avoid making redundancies?

You should take reasonable steps to avoid compulsory redundancies by considering alternatives, such as:

  • seeking applicants for voluntary redundancy and/or early retirement
  • seeking applications from existing staff to work flexibly
  • laying off casual or contract staff – provided that they are not fixed-term or part-time employees
  • recruitment restrictions
  • reducing or banning overtime
  • filling vacancies with existing employees
  • retraining employees and then moving them to other parts of the business
  • short-time working or temporary lay-offs
  • consulting with your employees could help you avoid making redundancies as they may have different insights into the way your business operates and possibly offer alternative solutions

Effective planning can lead to better job security for employees and it can avoid short-term solutions not suited to the long-term needs of your business.

How can I help redundant employees?

Where possible, you should try to find ways of helping employees come to terms with their situation. The practical and financial help you offer will of course depend on the size of your business and the seniority of any employee being made redundant.

It is good practice to do your best to help employees find a new job. To do this, you could:

  • advise them to contact their local Jobcentre to find out about suitable vacancies or training
  • set up interviews onsite for redundant employees- you could consider using a specialist outplacement agency
  • contact other local employers who may have vacancies
  • offer advice on searching for suitable vacancies in the press and on the internet
  • offer guidance on CVs, job application forms and interview techniques
  • highlight the importance of being prepared to consider a wide range of jobs
  • consider re-employment if business picks up, where this is appropriate

Click here to visit Hattons main Redundancy website page

If you would like legal advice on redundancies or any other employment law issue, please ring 08000 111 303 or visit our website 

The contents of this blog are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.


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