Redundancy is one of the most misunderstood areas of UK employment law. Being told your role is “at risk” is unsettling, and the process that follows can feel opaque. For employers, a flawed redundancy exercise can turn a lawful reorganisation into an unfair dismissal claim. Whether you are an employee facing redundancy or an employer planning one, understanding the rules matters — and in complex or high-stakes cases, a redundancy lawyer can protect your position.
In this guide, we explain what redundancy means under UK law, how to tell a genuine redundancy from a sham, the consultation rules employers must follow (including the 30-day and 45-day collective consultation periods), how selection pools and scoring should work, when you must be offered suitable alternative employment, how statutory redundancy pay is calculated, and how to challenge an unfair redundancy.
What Does Redundancy Mean in UK Law?
Redundancy has a precise legal meaning. Under section 139 of the Employment Rights Act 1996, a dismissal is by reason of redundancy only where it is wholly or mainly attributable to one of three situations:
- The employer has ceased, or intends to cease, carrying on the business altogether;
- the employer has ceased, or intends to cease, carrying on the business in the place where the employee was employed; or
- the requirements of the business for employees to carry out work of a particular kind have ceased or diminished (or are expected to do so).
The third situation is the most common: the work itself is disappearing or shrinking, whether through automation, restructuring, falling demand or a site closure. Note that it is the requirement for employees to do work of a particular kind that must diminish — not simply the amount of work overall. When the true reason for a dismissal is disputed, a redundancy lawyer will test the employer’s explanation against this statutory definition, because if the situation does not fit, the dismissal cannot lawfully be called a redundancy.
Genuine Redundancy vs Sham Redundancy
Employment Tribunals look at the reality of a situation, not the label the employer puts on it. A “sham” redundancy is where redundancy is used as a convenient cover for dismissing someone for a different reason — for example, to remove an employee who has raised a grievance, to avoid a disciplinary process, or to replace one person with another on cheaper terms.
Warning signs of a sham redundancy include:
- The “redundant” role reappears shortly afterwards under a slightly different job title;
- someone else is recruited to do substantially the same work;
- the selection process appears designed to engineer the departure of a particular individual; or
- there is no genuine diminution in the requirement for the work — the business simply wants a different person doing it.
Sometimes an employer genuinely needs fewer people but uses the redundancy to “bump” a favoured employee into the remaining role. Bumping can be lawful, but the selection must still be fair and free from discrimination. If the real reason for the dismissal was not redundancy at all, the dismissal is likely to be an unfair dismissal, and the employee may also have discrimination or whistleblowing claims.
The Redundancy Consultation Process
Consultation is the heart of a fair redundancy. It must be genuine: undertaken at a formative stage, with adequate information and adequate time, and with conscientious consideration of the employee’s representations. A decision that is already final before consultation begins is not consultation at all. A redundancy lawyer can assess whether the consultation was genuine or merely cosmetic.
Individual consultation
Every employee at risk of redundancy is entitled to fair individual consultation, even where only one role is affected. A proper individual process typically involves warning the employee that their role is at risk, explaining the business reasons, discussing the selection method (where a pool is used), considering alternatives to redundancy, holding at least one meaningful one-to-one meeting, and giving the employee the right to be accompanied and to appeal. Rushing this stage, or treating it as a box-ticking exercise, is one of the most common reasons redundancy dismissals are found unfair. Where the process feels rushed, a redundancy lawyer can advise on whether the shortcomings are enough to make the dismissal unfair.
Collective consultation: the 30-day and 45-day rules
Where an employer proposes to dismiss 20 or more employees as redundant at one establishment within 90 days, collective consultation duties apply under the Trade Union and Labour Relations (Consolidation) Act 1992. The employer must consult appropriate representatives — a recognised trade union or elected employee representatives — “in good time”, and consultation must begin at least 30 days before the first dismissal takes effect, or at least 45 days before where 100 or more redundancies are proposed.
The employer must also notify the Secretary of State using form HR1 before giving notice of dismissal. Failure to inform and consult can lead to a protective award of up to 90 days’ gross pay per affected employee — a significant liability that makes early advice essential for employers planning large-scale exercises. Individual consultation must still take place alongside the collective process. Employers planning a collective exercise should involve a redundancy lawyer early: the protective award risk alone justifies it.
Selection Pools and Redundancy Scoring
Where fewer roles are disappearing than the number of people doing them, the employer must decide who is provisionally selected. The starting point is the selection pool: the group of employees doing the same or broadly similar work, from which those to be retained will be chosen. Identifying the pool requires a genuine application of mind — an employer that draws the pool artificially narrowly to target an individual will struggle to defend the dismissal.
Employees in the pool are usually assessed against a scoring matrix. Fair criteria are objective and verifiable — for example, skills and qualifications, performance measured against documented appraisals, disciplinary record, and attendance. Criteria should be capable of being evidenced, applied consistently, and free from discrimination: penalising disability-related absence, maternity leave or part-time status, for instance, can give rise to Equality Act claims. Employees should be told their scores, understand how they were reached, and have a real opportunity to challenge them before any final decision. Employees who receive surprisingly low scores often ask a redundancy lawyer to review the matrix for bias or inconsistency.
Suitable Alternative Employment
Before confirming redundancies, the employer must take reasonable steps to avoid them — including considering suitable alternative employment within the business or an associated company. This duty applies throughout the process, not just at the start.
Where an alternative role is offered, the employee is entitled to a statutory trial period of four weeks to decide whether it is suitable. If the role proves unsuitable during that period, the employee can leave and still receive redundancy pay. Conversely, an employee who unreasonably refuses an offer of suitable alternative employment may lose the right to a statutory redundancy payment altogether — so both sides should take these offers seriously and, where the sums are significant, take advice from a redundancy lawyer before refusing or withdrawing one.
Statutory Redundancy Pay: How It Is Calculated
Employees with at least two years’ continuous employment are entitled to statutory redundancy pay. It is calculated from age, length of service and a week’s pay:
- Half a week’s pay for each complete year of service while aged under 22;
- one week’s pay for each complete year of service while aged 22 to 40; and
- one and a half weeks’ pay for each complete year of service while aged 41 or over.
Only the last 20 years of service count, and a week’s pay is subject to the statutory maximum, which is reviewed each April (from April 2025 it stood at £719 per week — always check the current figure). Genuine redundancy payments of up to £30,000 can be paid free of income tax. Many employers offer enhanced or contractual redundancy terms above the statutory minimum, often in exchange for a settlement agreement. A claim for statutory redundancy pay itself must generally be made within six months less a day of the employment ending. Because the calculation is easy to get wrong, a redundancy lawyer can check that age bands, service dates and the pay cap have been applied correctly.
Notice, Holiday Pay and Settlement Agreements
Redundancy does not remove the usual termination payments. A redundant employee remains entitled to their contractual or statutory notice (or a payment in lieu of notice), plus pay for accrued but untaken holiday. Redundancy is one of several ways in which a termination of employment can come about, and the final paperwork often takes the form of a settlement agreement — particularly where enhanced terms are offered. Because a settlement agreement requires the employee to take independent legal advice for it to be binding, many people meet a redundancy settlement agreement solicitor at this stage to review the terms, the tax position and any restrictions such as non-compete clauses.
When Should You Speak to a Redundancy Lawyer?
You do not need a lawyer for every redundancy — many straightforward exercises conclude without dispute. But there are moments when advice from redundancy lawyers pays for itself. Employees should consider advice as soon as they are placed at risk if the selection seems targeted, if they suspect discrimination or a sham, if they are offered a settlement agreement, or if the redundancy pay calculation looks wrong. Employers should take advice before finalising pools and scoring, before any collective exercise involving 20 or more proposed dismissals, and whenever a high-risk employee — such as someone on maternity leave or who has blown the whistle — is in the frame. Early advice usually costs far less than defending a tribunal claim.
Challenging an Unfair Redundancy
A redundancy dismissal can be challenged as unfair on several grounds. Some reasons for selection are automatically unfair — including pregnancy and maternity, asserting statutory rights, whistleblowing, trade union membership or activities, and jury service. A selection tainted by discrimination on grounds of age, disability, race, sex or other protected characteristics can also found claims under the Equality Act 2010. And even where the redundancy itself was genuine, a dismissal will be unfair if the employer failed to consult properly, used an unfair selection process, or failed to consider suitable alternative employment.
Most claims must be started with ACAS early conciliation, followed by an Employment Tribunal claim within three months less one day of the effective date of termination (tribunals extend time only rarely). Keep copies of the at-risk letter, consultation notes, scoring matrix and any alternative roles offered — contemporaneous documents often decide these cases. Because the three-month deadline is strict, speak to a redundancy lawyer as soon as you suspect the redundancy was unfair.
Redundancy law rewards employers who plan carefully and consult genuinely, and it protects employees whose dismissals are rushed, targeted or discriminatory. Whether you are facing redundancy or carrying one out, understanding where you stand is the first step — and where the stakes are high, a redundancy lawyer can help you take the next one with confidence.
