Definition
A form of dismissal that occurs when an employer needs to reduce their workforce, typically because a role is no longer needed, the business is closing, or the workplace is relocating. It is not related to the employee's conduct or performance.
UK Context
UK redundancy law is governed by the Employment Rights Act 1996. Employers must follow a fair selection process, consult with affected employees (and trade unions for 20 or more redundancies), and offer statutory redundancy pay to employees with two or more years of continuous service.
Best Practices
- Use objective and measurable selection criteria that are free from discrimination
- Explore all alternatives to redundancy before making final decisions, including redeployment
- Provide adequate support such as time off for job hunting and outplacement services
Frequently Asked Questions
How is statutory redundancy pay calculated?
It is based on age, length of service, and weekly pay (capped at 719 pounds per week in 2025/26). Employees get half a week's pay for each full year of service under 22, one week's pay for each year aged 22-40, and one and a half weeks' pay for each year aged 41 and over, up to a maximum of 20 years.
What is the consultation period for redundancy?
If making 20 to 99 employees redundant, consultation must begin at least 30 days before the first dismissal. For 100 or more redundancies, it must begin at least 45 days before. Individual consultation is also required regardless of numbers.