This guide is maintained as a current resource for July 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.
A detailed explanation of what counts as a genuine redundancy in England and Wales, outlining statutory definitions, lawful business reasons, examples, common pitfalls, tribunal considerations and employee rights under employment law.
In employment law for England and Wales, genuine redundancy is a legal concept with specific statutory meaning. It determines whether an employer's decision to dismiss an employee because of changes in their business amounts to a lawful redundancy. A redundancy that is not genuine can expose the employer to claims at an employment tribunal, including unfair dismissal and discrimination. This article explains what a genuine redundancy is, how it arises, key legal tests, practical examples, employee rights, and common issues that arise in disputes.
Legal Definition of Redundancy
The statutory definition of redundancy is found in section 139 of the Employment Rights Act 1996. According to this definition, an employee's dismissal is a redundancy if it is attributable wholly or mainly to:
- the employer ceasing, or intending to cease, to carry on the business for which the employee was employed;
- the employer ceasing, or intending to cease, to carry on the business at the location where the employee was employed; or
- the requirements of the business for employees to carry out work of a particular kind (or in a particular place) have ceased or diminished or are expected to do so.
Tribunals often refer to these situations as a genuine redundancy situation.
Core Elements of a Genuine Redundancy
A genuine redundancy situation requires two essential elements:
- A real business reason for redundancy: The employer must genuinely need to reduce the workforce because the requirement for the work has diminished or ceased.
- A proper statutory process: Even where a redundancy situation exists, employers must still follow fair procedures including consultation, fair selection and consideration of alternatives.
Genuine Business Reason
A genuine redundancy arises where the business has a legitimate operational need to reduce staffing levels due to changes in demand, structure, or service delivery. Common lawful reasons include:
- Business closure: The employer shuts down the entire business or a specific workplace.
- Reduced demand for work: The employer needs fewer employees to do the work of a particular kind because of downturns in demand or loss of contracts.
- Reorganisation or restructure: Changes in organisational structure remove or combine roles, resulting in fewer overall posts.
- Relocation: The business moves to a new location where fewer or different roles are needed.
- Technological changes: New equipment or systems mean that the work previously carried out by employees is no longer required, e.g. automation replacing manual processing.
A genuine redundancy may exist even if the specific tasks continue but the overall need for people to perform the work has reduced. For instance, one employee's role may be distributed among other roles as part of a restructure, so long as the total requirement for staff to do that particular kind of work has diminished.
What Does Not Count as a Genuine Redundancy
A redundancy is not genuine if the dismissal is essentially for another reason such as performance issues, misconduct, or discriminatory motives. Examples of non-genuine redundancy situations include:
- The role still exists and the employer simply intends to hire someone else to do the same work.
- Failure to consult or consider alternatives such as redeployment.
- Redundancy used as a cover for dismissing an employee for poor performance, disciplinary issues or to avoid contractual obligations.
- Discriminatory selection: dismissing someone because of protected characteristics like age, sex, disability, pregnancy or because they have asserted legal rights (e.g. maternity leave, whistleblowing).
- Using redundancy for personal reasons such as poor relationships between the employee and management.
If one of these factors predominates the decision to dismiss, the redundancy may be ruled not genuine, enabling the employee to bring a claim for unfair dismissal or discrimination.
Statutory Redundancy vs Unfair Dismissal
It is important to distinguish between redundancy as a statutory concept and fairness of the dismissal process:
- An employer must demonstrate a genuine redundancy reason to justify the dismissal.
- Even where the reason is genuine, the employer must conduct the redundancy fairly and reasonably (including consultation and fair selection). An unfair process can itself give rise to an unfair dismissal claim, even where the redundancy reason exists.
Therefore, tribunals look at both the reason for redundancy and the process used in making the decision.
Practical Indicators of Genuine Redundancy
Practical examples that tribunals may accept as indicators of a genuine redundancy situation include:
- A downturn in business leading to fewer orders and less work.
- Introduction of new technology that reduces the overall number of employees required.
- Company relocation requiring fewer staff to operate in the new location.
- Merger or acquisition resulting in role duplication and reduced workforce needs.
These situations must be supported by objective evidence such as business forecasts, financial data and documented organisational plans.
Assessment by Tribunals
If an employee disputes whether their redundancy was genuine, an employment tribunal will consider evidence from both sides. The employer must show:
- the reason for redundancy was genuine and lawful; and
- the process leading to dismissal was fair and in line with statutory requirements.
Both elements are critical. Tribunals apply legal tests from case law to evaluate the employer's rationale and procedural fairness.
Employee Rights if Redundancy is Not Genuine
If a tribunal finds a redundancy is not genuine or the process unfair:
- the employee may succeed in a claim for unfair dismissal;
- they may be entitled to compensation for financial loss;
- they may also bring claims for discrimination where relevant.
Time limits for bringing such claims are generally three months less one day from the date of dismissal, following any required Acas Early Conciliation.
Key Takeaways
A genuine redundancy occurs when an employer no longer needs employees to do work of a particular kind and has a real, substantiated business reason for making roles redundant. It must be supported by a lawful redundancy process, including consultation and fair selection. Redundancy that masks other motives or fails procedural fairness will not count as genuine and may lead to claims in an employment tribunal.
