What is redundancy?

Redundancy is one of the fair reasons for dismissal in UK employment law, but it is also one of the most frequently misused — both by employers who use it to avoid dealing with performance issues and those who carry out the process incorrectly. Understanding what redundancy means in legal terms and what a compliant process looks like is important for any employer who may need to reduce headcount.

Redundancy in UK law occurs when a business closes, a specific workplace closes, or the requirement for employees to do a particular kind of work diminishes or ceases. It is not a catch-all mechanism — if the role will be filled by someone else doing the same work, that is not redundancy. Employees with a qualifying length of service who are made redundant are entitled to statutory redundancy pay, calculated according to a formula based on age, length of service, and weekly pay.

A redundancy process must be conducted fairly — including proper consultation with the affected employee before a final decision is made, genuine consideration of alternatives, and a fair selection process if not all employees in a group are being made redundant. Failing to follow a fair process can make an otherwise valid redundancy into an unfair dismissal. Our guide to redundancy for UK employers covers the process step by step.