This guide is maintained as a current resource for September 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Comprehensive guide to redundancy and wrongful termination in England and Wales, explaining redundancy law, fair procedures, wrongful termination claims, statutory and contractual rights, tribunal processes, compensation and practical considerations for employees and employers.
When an employee's job ends because their role is no longer required, this is generally treated as redundancy in UK employment law. Redundancy is a specific form of dismissal with its own legal framework. However, not all redundancies are carried out lawfully or correctly. Where an employer fails to respect contractual or statutory rights surrounding redundancy, this can lead to claims of wrongful termination (breach of contract) and unfair dismissal before an employment tribunal. This article explains how redundancy intersects with wrongful termination, what legal tests and procedures apply, the rights and remedies available, and practical issues employees and employers should consider.
What Is Redundancy?
Redundancy occurs where an employee is dismissed because the employer's need for employees to carry out work of a particular kind has ceased or diminished or is expected to do so. Redundancy tends to arise when work disappears due to economic changes, restructuring, business closure or technological changes.
Redundancy is a statutory concept separate from other forms of dismissal. As a reason for dismissal, it can also be a potentially fair reason under the Employment Rights Act 1996 provided the employer acts reasonably in all aspects of the process.
Wrongful Termination in Redundancy Situations
Wrongful termination (also called wrongful dismissal) arises where an employer breaches the terms of the employment contract in ending the employment relationship. In the context of redundancy, this most commonly appears when an employer dismisses without giving:
- Proper notice in accordance with the contract or statutory minimum,
- Notice pay, including payment in lieu of notice where contractually permitted,
- Contractually required procedures related to redundancy.
For example, if an employer fails to honour a contractual notice period during a redundancy, the employee may claim wrongful termination for breach of contract.
Wrongful termination claims can be brought regardless of the employee's length of service, unlike statutory unfair dismissal rights which normally require at least two years of continuous employment (subject to potential reforms).
Redundancy Procedures and Legal Requirements
Consultation
When proposing redundancy, employers are legally required to consult with affected employees and consider their representations. Consultation should take place before dismissal and be meaningful. Failure to consult can lead to claims against the employer, and where collective redundancies are involved (20 or more over 90 days), minimum statutory consultation periods apply.
Selection Criteria
If multiple employees are at risk of redundancy, employers must apply objective and non‑discriminatory selection criteria, such as length of service, skills, performance, attendance records or disciplinary history. Unfair or discriminatory criteria can render dismissals unlawful.
Right to Suitable Alternative Employment
Employers should consider offering suitable alternative roles to redundant employees wherever possible before final dismissal. Failing to explore alternatives can expose an employer to claims that the redundancy was not genuine or that there was a failure to act reasonably.
Unfair Dismissal and Redundancy
If redundancy procedures are not followed, or redundancy is a pretext for dismissing an employee for another reason (such as poor performance or discrimination), the affected employee may have grounds to bring an unfair dismissal claim to an employment tribunal. To succeed, an employee must generally show:
- The redundancy was not genuine (for example, work did not actually diminish),
- The employer failed to follow a fair process (consultation, selection, etc.),
- The selection process was discriminatory or unreasonable.
For a tribunal claim for statutory redundancy pay, an employee usually must have at least two years' continuous service, but unfair dismissal claims for redundancy may require only one year's service if the selection process or procedure itself was unfair.
Redundancy Payments and Compensation
Statutory Redundancy Pay
Employees with at least two years' service are normally entitled to statutory redundancy pay, calculated based on age, length of service and weekly pay, subject to statutory caps. The sum is tax‑free up to statutory limits.
Wrongful Termination Remedies
If an employer breaches the employment contract in the redundancy process (for example, by failing to give proper notice), the employee may claim wrongful termination compensation for the contractual loss. Employment tribunals can award damages for notice pay and related losses, usually up to a statutory limit (around £25,000). Higher‑value claims may be brought in civil courts.
Unfair Dismissal Remedies
Where a tribunal finds unfair dismissal, remedies may include:
- A basic award (similar to statutory redundancy pay),
- A compensatory award for financial loss such as lost earnings, subject to statutory limits.
Compensation aims to put the employee in the position they would have been in had the unfair dismissal not occurred.
Importantly, an employee cannot usually recover both statutory redundancy pay and the basic award for unfair dismissal: one is set off against the other where applicable.
Redundancy vs Wrongful Termination: Key Distinctions
| Aspect | Redundancy | Wrongful Termination |
|---|---|---|
| Legal Basis | Statutory (Employment Rights Act 1996) | Contractual breach of employment contract |
| Qualifying Period | 2 years' service for statutory redundancy pay; 1 year for some unfair dismissal redundancy claims | No minimum service for breach of contract |
| Focus | Genuine redundancy reason and fair process | Failure to honour contract terms (e.g., notice) |
| Remedies | Statutory redundancy pay, unfair dismissal awards | Damages for breach of contract (notice pay, benefits) |
Practical Scenarios and Risks
Sham Redundancy
If an employer claims redundancy but in reality the role still exists or others continue doing the same work, a tribunal may find that the redundancy was not genuine, opening the door to unfair dismissal claims. In such cases, the true reason for dismissal may be investigated.
Failure to Consult
Even in genuine redundancy situations, failing to consult with employees can lead to claims for protective awards (up to 13 weeks' pay) and potential unfair dismissal findings if the overall process was unreasonable.
Discrimination in Redundancy
If an employee is selected for redundancy on the basis of a protected characteristic (e.g., age, disability, gender), a claim under the Equality Act 2010 may arise alongside or instead of redundancy or wrongful termination claims. Employers must ensure that selection criteria do not indirectly discriminate.
Time Limits and Claims Process
Claims relating to redundancy, wrongful termination and unfair dismissal generally must be presented to an employment tribunal within three months less one day from the date of dismissal, after notifying ACAS and completing early conciliation. Redundancy pay claims may have specific deadlines (often six months), but unfair dismissal and breach claims follow the three‑month rule. Missing these deadlines can prevent a tribunal from hearing the claim.
Common Questions
Can I claim redundancy if I was dismissed without notice?
Yes. If the dismissal was genuinely redundancy but lacked proper notice, you may have both redundancy pay and wrongful termination claims for breach of contract.
Do I need a minimum service to claim wrongful termination?
No. Wrongful termination claims do not require a minimum period of service, unlike statutory redundancy and unfair dismissal rights.
What if redundancy selection was unfair?
You may bring an unfair dismissal claim even if redundancy was the reason, provided you can show unfair selection or process and have the requisite service.
Key Takeaways
Redundancy is a legally recognised reason for dismissal in England and Wales when work genuinely ceases or diminishes. However, employers must follow fair procedures, consult affected staff, apply objective selection criteria and provide correct pay and notice. Failure to do so can give rise not only to statutory redundancy pay claims but also claims for wrongful termination where contract terms are breached, and unfair dismissal where the process or reason for redundancy is unlawful. Understanding these legal frameworks, remedies and time limits enables employees and employers to safeguard their rights and navigate redundancy and termination disputes effectively.
