What Is the Legal Definition of Redundancy?

Redundancy is one of the five potentially fair reasons for dismissal under UK employment law. The legal definition is set out in section 139 of the Employment Rights Act 1996, which determines when a dismissal is treated as being “by reason of redundancy” for the purposes of employment rights, including redundancy pay and unfair dismissal claims.

Understanding the legal definition is important because not every job loss labelled as “redundancy” is legally a redundancy.

Statutory definition of redundancy

Under section 139 Employment Rights Act 1996, a dismissal is a redundancy if it is wholly or mainly due to one of the following situations:

1. Business closure

Where the employer:

• stops carrying on the business entirely, or
• intends to stop carrying it on

2. Workplace closure

Where the employer:

• stops carrying on the business at the employee's workplace location, or
• intends to close that workplace

3. Reduced requirement for employees

Where:

• the employer's need for employees to do work of a particular kind has ceased or diminished, or is expected to cease or diminish
• this can apply across the business or at a specific workplace

This definition is applied strictly by employment tribunals when deciding whether a genuine redundancy situation exists.

Key legal principle: redundancy is about the job, not the person

A central principle in UK case law is that redundancy relates to the role, not the employee.

This means redundancy occurs where:

• the job disappears entirely, or
• fewer employees are needed to do the same type of work

It does not depend on performance, conduct, or capability. If dismissal is linked to those factors, it is not redundancy in law.

The leading authority, Murray v Foyle Meats Ltd, confirms that tribunals focus on whether the employer's need for employees to carry out work of a particular kind has reduced.

The three legal redundancy scenarios explained

Business closure redundancy

This applies when:

• a company shuts down entirely
• a business division closes permanently
• a sole trader ceases trading

In these cases, all roles within the business or part of the business disappear.

Workplace closure redundancy

This applies when:

• a specific site, office, or branch closes
• employees are no longer required at that location

The business may continue elsewhere, but the workplace itself ceases.

Reduced requirement for work of a particular kind

This is the most common form of redundancy. It occurs when:

• fewer staff are needed due to restructuring
• work is outsourced or automated
• demand for services decreases
• roles are merged or reorganised

The legal question is whether there is a diminished need for employees to perform that type of work, not whether the work still exists in some form.

What does not count as redundancy

Employment tribunals will usually reject redundancy claims where dismissal is actually due to:

• poor performance or capability
• misconduct or disciplinary issues
• personality conflict or breakdown in relationships
• replacement of an employee with another person doing the same role
• dismissal disguised as redundancy to avoid unfair dismissal rules

If the role continues unchanged and is filled by someone else, redundancy is unlikely to be established.

Genuine redundancy vs sham redundancy

Tribunals examine whether the redundancy is genuine by looking at:

• whether the job actually disappeared
• whether workload genuinely reduced
• whether selection processes were fair and objective
• whether consultation was meaningful
• whether suitable alternative roles were considered

If redundancy is used as a justification for dismissal for another reason, the dismissal may be found unfair.

Legal rights in a redundancy situation

Where a genuine redundancy exists, employees may be entitled to:

• statutory redundancy pay (if they have at least 2 years' service)
• notice pay (or pay in lieu of notice)
• consultation before dismissal
• time off to look for work or training
• suitable alternative employment offers, where available

Employers must also follow a fair selection and consultation process to avoid unfair dismissal claims.

Collective redundancy rules

If an employer is making 20 or more employees redundant within 90 days, additional legal obligations apply:

• consultation with employee representatives
• minimum consultation periods
• notification to the government (Secretary of State)

Failure to follow collective consultation rules can result in a protective award from an employment tribunal.

Time limits for redundancy-related claims

Claims relating to redundancy (including unfair dismissal) must usually be brought within:

• 3 months less 1 day from the effective date of termination

Before issuing a tribunal claim, the claimant must begin ACAS Early Conciliation, which pauses the limitation period.

Common legal disputes in redundancy cases

Redundancy claims often focus on:

• whether a genuine redundancy situation existed
• whether selection criteria were fair and non-discriminatory
• whether consultation was adequate
• whether suitable alternative employment was properly considered
• whether dismissal was actually for another reason

These issues are frequently assessed together in unfair dismissal tribunal claims.

Key Takeaways

The legal definition of redundancy under UK employment law is found in section 139 of the Employment Rights Act 1996. A redundancy occurs where an employer closes a business or workplace, or where the need for employees to carry out work of a particular kind has reduced or ceased. The focus is on the disappearance or reduction of work roles, not the employee personally. Whether a redundancy is lawful depends not only on this definition but also on whether a fair process has been followed, including consultation, selection, and consideration of alternative employment.