Can Redundancy Apply Following Departmental Reorganisation?

Departmental reorganisation is a common feature of workplace restructuring in the UK. Employers may merge teams, change reporting lines, redistribute duties, or redesign job roles to improve efficiency, reduce costs, or adapt to business needs. These changes often lead employees to question whether their role is at risk of redundancy.

Under UK employment law, redundancy can apply following a departmental reorganisation, but only where the legal definition of redundancy is met. A reorganisation alone does not automatically justify dismissal. Employers must show that the need for employees to carry out work of a particular kind has genuinely reduced and must follow a fair and lawful process.

This article explains when redundancy arises during departmental restructuring, employee rights, employer obligations, and how tribunals assess fairness in these situations.

What Counts as Redundancy in UK Employment Law?

Redundancy is defined under the Employment Rights Act 1996. A dismissal is potentially a redundancy if it is wholly or mainly because:

• The employer closes or relocates the business
• The workplace closes
• There is a reduced requirement for employees to carry out work of a particular kind

Departmental reorganisation usually falls under the third category. This is the most common scenario in UK workplaces.

However, redundancy only applies if there is a genuine reduction in the need for specific work, not simply a change in how work is structured or allocated.

When Does Departmental Reorganisation Lead to Redundancy?

A departmental restructure can create redundancy situations in several ways:

1. Reduced need for specific roles

If tasks are removed, automated, or reassigned to other departments, the need for certain roles may decline.

2. Merging of teams

When two departments are combined, duplicate roles may arise, leading to potential redundancies.

3. Elimination of managerial layers

Reorganisations often remove middle management positions, particularly in flatter organisational structures.

4. Redistribution of responsibilities

If duties are spread across fewer employees or absorbed into existing roles, some positions may no longer exist in their original form.

When Reorganisation Does NOT Justify Redundancy

A redundancy situation does not exist simply because:

• Job titles change
• Reporting structures are altered
• Employees are moved into new teams
• Duties are redistributed but overall workload remains the same

In these cases, the employer may be attempting a restructuring rather than a redundancy exercise. If no genuine reduction in work exists, dismissal may be considered unfair.

Employment tribunals look at substance over form, meaning they assess what has actually changed in the workplace, not just how the employer labels it.

Legal Requirements for a Fair Redundancy Process

Even where a genuine redundancy situation exists, employers must follow a fair process. Failure to do so can result in claims for unfair dismissal.

1. Meaningful consultation

Employers must consult employees before making final decisions. Consultation should include:

• The reasons for the proposed reorganisation
• How roles may be affected
• Alternatives to redundancy
• Opportunities for employees to respond

Consultation must be genuine and take place before decisions are finalised.

2. Fair selection criteria

Where fewer roles exist than employees, employers must use objective criteria to decide who is at risk. Common criteria include:

• Skills and qualifications
• Experience relevant to remaining roles
• Performance history
• Attendance records (used carefully to avoid discrimination issues)

Selection must be transparent and evidence-based. Personal preference or arbitrary decisions are not permitted.

3. Consideration of suitable alternative employment

Employers are legally expected to consider whether affected employees can be moved into other roles within the organisation.

This may include:

• Redeployment within the same department
• Transfer to another team
• Retraining for new responsibilities

Where suitable alternative roles exist, employers should offer them before proceeding with dismissal.

Suitable Alternative Employment and Trial Periods

If an employee accepts an alternative role during a reorganisation, they are entitled to a statutory trial period. This allows both parties to assess whether the role is suitable.

If the role proves unsuitable during the trial period, the employee may still retain redundancy rights, provided the decision is made within the statutory timeframe.

Redundancy Pay Rights

Employees may be entitled to statutory redundancy pay if they:

• Have at least two years of continuous service
• Are dismissed due to redundancy
• Do not unreasonably refuse suitable alternative employment

Statutory redundancy pay is calculated based on:

• Age
• Length of service
• Weekly pay (subject to a statutory cap)

Some employers may also offer enhanced redundancy packages through contract terms or internal policies.

Risks of Unfair Dismissal in Reorganisation Cases

A redundancy dismissal following departmental reorganisation may be considered unfair if:

• There was no genuine reduction in work
• Consultation was inadequate or rushed
• Selection criteria were unclear or biased
• Alternative roles were not properly considered
• The employer had already decided outcomes before consultation

Employment tribunals examine whether the employer acted reasonably in all circumstances.

Discrimination Risks During Reorganisation

Departmental restructuring can sometimes disproportionately affect certain groups. If redundancy selection disadvantages employees based on protected characteristics, claims may arise under the Equality Act 2010.

Protected characteristics include:

• Age
• Disability
• Sex
• Race
• Religion or belief
• Pregnancy and maternity
• Sexual orientation

For example, if a reorganisation disproportionately impacts older employees without objective justification, this may give rise to discrimination claims.

Time Limits for Bringing Claims

Employees who believe a redundancy following reorganisation is unfair must usually bring a claim for unfair dismissal within:

• Three months less one day from the date of dismissal

Before making a claim, employees are generally required to engage in ACAS Early Conciliation.

Missing the deadline usually prevents the claim from proceeding.

Collective Consultation Requirements

If a departmental reorganisation leads to 20 or more redundancies within a 90-day period, collective consultation rules apply.

Employers must:

• Consult employee representatives or trade unions
• Provide written information about proposed redundancies
• Observe minimum consultation periods

Failure to comply may result in a protective award of up to 90 days' pay per affected employee.

Practical Considerations for Employees

Employees affected by departmental restructuring may wish to:

• Request written reasons for redundancy selection
• Review consultation documents and timelines
• Check whether alternative roles were offered
• Compare their role before and after the reorganisation
• Keep records of communications and meetings

These steps can be relevant if a dispute arises.

Practical Considerations for Employers

Employers carrying out a departmental reorganisation should ensure:

• A clear business rationale for changes is documented
• Consultation begins early and is properly recorded
• Selection criteria are objective and consistently applied
• Alternative employment options are actively explored
• Legal obligations for collective consultation are met where applicable

Poorly managed reorganisations significantly increase the risk of tribunal claims.

Common Questions

Does changing job titles count as redundancy?

Not necessarily. A change in job title alone does not usually amount to redundancy unless the role itself no longer exists.

Can an employer restructure to avoid redundancy rules?

No. Employment tribunals will examine whether a genuine redundancy situation exists, regardless of how the employer describes the process.

Is redeployment always required?

Employers must consider redeployment where possible, but they are not required to create new roles.

Can employees challenge a reorganisation?

Employees cannot stop a reorganisation, but they can challenge the fairness of any resulting dismissal.

Key Takeaways

Redundancy can apply following departmental reorganisation, but only where there is a genuine reduction in the need for employees to carry out specific work. Reorganisation alone does not automatically justify dismissal. Employers must follow a fair process involving consultation, objective selection, and consideration of alternative employment.

Where these requirements are not met, employees may have grounds to bring claims for unfair dismissal or discrimination. Proper handling of restructuring is essential to ensure compliance with UK employment law and reduce legal risk.