Redundancy: overview

by Practical Law Employment

A practice note providing an overview of the legal framework for redundancy in the UK. This practice note outlines the statutory definition of "redundancy" under the Employment Rights Act 1996 (ERA 1996), including business and workplace closures and a reduced requirement for employees. It addresses key employer obligations, such as the duty to inform and consult with employees both individually and collectively. The guidance details when the duty for collective consultation under the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) is triggered and the requirement to notify the Secretary of State. This practice note explores the elements of a fair redundancy process to minimise the risk of unfair dismissal claims, covering the identification of selection pools, objective selection criteria, and the duty to consider suitable alternative employment. It also discusses alternatives to compulsory redundancy, such as lay-offs and short-time working. In addition, this practice note examines employee entitlements, including statutory redundancy payments, claims from the National Insurance Fund, and enhanced contractual redundancy schemes.