Redundancy: Process, Rights and Next Steps
Redundancy occurs where a role ceases to be required — the business closes, a workplace closes, or the need for that kind of work reduces. It concerns the role rather than the individual's performance.
What a fair process usually involves
A genuine redundancy situation, rather than a redundancy used to remove someone for other reasons.
Consultation, individually and collectively where numbers exceed a threshold. Collective consultation requirements with defined minimum periods apply above certain numbers in many jurisdictions.
Fair and objective selection criteria applied consistently, where some roles in a group are affected and others are not.
Consideration of suitable alternative employment within the organisation, including in associated companies.
The right to be accompanied at meetings in many systems.
Failures in process are the most common basis on which a redundancy dismissal is found unfair, even where the underlying redundancy was genuine.
Selection criteria
Should be objective and measurable where possible: skills, qualifications, disciplinary record, attendance excluding protected absences.
Criteria that discriminate — related to age, sex, disability, pregnancy, part-time status or trade union activity — make the dismissal automatically unfair in most systems.
You are generally entitled to know the criteria and how you scored, and asking for your scores is reasonable.
Payments
Statutory redundancy pay is calculated from age, length of service and weekly pay in many jurisdictions, subject to caps.
Contractual redundancy schemes may be more generous, and previous consistent practice can create an expectation.
Notice pay, or payment in lieu, and payment for accrued untaken leave.
Tax treatment of redundancy payments differs from ordinary pay in many systems, frequently with an exempt threshold, which is worth understanding before agreeing anything.
Settlement agreements
Frequently offered, providing an enhanced payment in exchange for waiving claims.
Independent legal advice is usually required for the waiver to be binding, and the employer normally contributes to the cost.
Read what is being waived, and check terms on references, confidentiality and any restrictive covenants being reaffirmed.
You are not obliged to sign, and there is usually room to negotiate.
Immediately afterwards
Check entitlement to benefits, which frequently begins sooner than people assume.
Notify your mortgage lender and any credit providers if payments will be affected, since arrangements made before arrears are far easier.
Check whether any insurance policies include redundancy cover, which some payment protection products do.
Take stock before applying widely. A short period of considered searching frequently produces better outcomes than immediate volume applications.
This article is general information and not legal advice. Employment law varies considerably by jurisdiction, and time limits for claims are short.
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