Redundancy and business reorganisation

Sometimes an employer may argue that a dismissed employee was not “redundant” but was dismissed for “some other substantial reason” arising from a business reorganisation. If correct, the employee would not be entitled to a redundancy payment. The question for a tribunal will always be whether the definition of redundancy is met (ie whether the dismissal is due to the closure of the workplace, or a reduced need for employees)


An employer can legitimately dismiss an employee if he or she will not accept a change in terms and conditions resulting from a reorganisation provided the employer can show such changes are necessary to the continued management and efficiency of the business, and the employee's refusal to ‘fit in’ justifies the dismissal. It is sufficient for an employer to show the reorganisation is for sound business reasons, which require a change in an employee's terms and conditions. However, if the reorganisation results in a decreased need for employees, a dismissed employee can still claim a redundancy situation existed and that their dismissal resulted from that.

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