Unfair dismissal and redundancy

Redundancy is a potentially fair reason to dismiss an employee.


The Acas Code of Practice on Disciplinary Procedures does not apply to redundancy dismissals. However an employer will still be expected to go through a fair process, which will involve those matters listed above. Therefore an employer who does not:-


  • Consult representatives and individual employees before dismissing them
  • Properly identify those who are potentially redundant,
  • Adopt fair criteria, and apply that criteria fairly, to select individuals from that “pool” of potentially redundant employees
  • Inform the redundant employee of any available alternative employment that might be suitable for them

Consulting each employee

 The employer should consult each affected employee before dismissal notices are handed out, so that there is a chance of real consultation and time for the employee to respond.


The consultation may involve the following:

  • Why their type of job is under threat.
  • Explain why according to the selection criteria this employee may be chosen for redundancy.
  • The employee should be given a couple of days to respond after being told.
  • The employer should consider any views or opinions expressed by the employee.
  • Both the employer and employee should consider any alternative work that the employee could do or any ways in which the employee could stay in their current job.


Selection procedure

Where an individual role is identified as redundant, eg the assistant director of HR, and there is only one person doing that particular role, then no “selection” procedure is required. That job is redundant, and so the individual is redundant.

The employer may be required by an ET to demonstrate why they consider the post redundant, so that the ET can be satisfied this is really a redundancy, but tribunal’s have no power to question the business sense behind a decision, however rash or apparently unsound the decision was. Provided the employer genuinely believed there was a redundancy, that will be sufficient.


Similarly, if a group of employees doing similar work (eg the IT department) are selected for redundancy the employer must show what type of work they do and why the demand for that work has ceased.


If the employer only intends to make some members of a group redundant, then the employer must demonstrate the “selection process” they adopted, i.e. they must show how they picked the unlucky ones.


The group of employees at risk of redundancy is known as the “pool”. It should be fairly identified. It might, eg, be unfair for an employer who is closing it’s night shift to simply select as redundant those who work on the night shift. The appropriate pool might be all staff, including night and day workers.


Next, the employer must show how it identified the individuals that it would make redundant. This can range from simply saying ‘last in first out’ (ie to dismiss the latest recruits) or to have a scoring system, with the employer giving points for certain job skills, length of service, disciplinary record, etc.


The selection criteria should not be based upon an individual’s view of each employee (for example, what the personnel manager thinks).


The selection procedure and criteria cannot be based upon unfair reasons such as sex, age, disability or trade union activity.


The criteria must be applied fairly and in a non-discriminatory way. For example if sickness absence from work is a criterion, a woman’s pregnancy-related absence must not be counted.


Alternative employment

In order to ensure that a dismissal is fair, an employer must have taken reasonable steps to identify whether they (or even another company within the same group) has other employment.


Offers may be made of work which is much lower paid, or of lower status. That does not mean that the employee will lose their redundancy pay if they refuse them, but merely that the employer will have to offer them the option in order to ensure that all alternatives to dismissal are explored and that the dismissal is fair.

The employee may lose the right to a redundancy payment if they unreasonably refuse an offer of alternative employment.

More information on offers of alternative employment


Compensation for unfair dismissal on grounds of redundancy

Compensation will be assessed in the same way as other unfair dismissal cases, but if the employee has had a redundancy payment, they will not also get a “basic award” for unfair dismissal.


If the employer has made only a procedural error (eg in not consulting the employee first), and can show that following the proper procedure would have made no difference – the employee would have been dismissed anyway - the loss to the employee might in fact be nothing. In those circumstances no compensatory award would be payable.

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