What is Redundancy?

This simple question has been the subject of some controversy over time and may well continue to be so in the future. I’m not even going to begin to give a definitive answer here.

'Redundancy' is a potentially fair reason to terminate an employee's employment. An employee who is dismissed shall be taken to be dismissed by reason of redundancy if:

· The dismissal is wholly or mainly attributable to the fact that the employer has ceased or intends to cease to carry on the business for the purposes of which the employee was employed by him, or to carry on that business in the place where the employee was so employed, or

· The fact that the requirements of that business for employees to carry out work of a particular kind or for employees to carry out work of a particular kind in the place where the employee was employed have ceased or diminished or are expected to cease or diminish.

‘Redundancy’ falls into several broad categories including:
· Disappearing business
· Disappearing workplace
· Disappearing job
· Requirements of the workplace
· The need for fewer employees to do the same amount of work
· Reduced output
· Change in the nature of the job.

For example, the following situations are quite likely to be real redundancies:

· The organisation wishes to close a particular branch or office.
· The organisation stops producing a particular product, or providing a particular service
· The organisation's business has shrunk.
· The organisation no longer requires employee's to carry out a particular job or function.

On the other hand the following situations are unlikely to be a real redundancy situation:

· The organisation wants to use this as an excuse to remove an employee who is not performing adequately in the role or does not fit in for whatever reason.
· The organisation wants to replace an employee with someone on a lower rate of pay.

Remember, even if there is a real redundancy situation, it is essential that the employer follow a fair redundancy procedure. Frankly, a lot of employers get this process wrong and end up with claims that could otherwise have been avoided if a little more care had been taken at the outset.


See my firm website:
www.reculversolicitors.co.uk or www.compromise-agreement.net