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 comprehensive explanation of what redundancy means in UK employment law, including legal definitions, employee rights, fair selection, consultation, redundancy pay, notice, tribunal claims and practical steps for employees in England and Wales.
Redundancy is a specific legal concept in UK employment law, particularly within England and Wales. It refers to a type of dismissal that arises when an employer no longer requires an employee's role to be performed by anyone because of changes in the organisation's needs or structure. Redundancy has precise definitions, procedural requirements and employee rights attached to it under statutory law. This article explains what redundancy means, when it applies, employees' legal rights, how it should be handled, and potential legal remedies where the process is flawed.
What Redundancy Is
Under section 139 of the Employment Rights Act 1996, redundancy arises in two main circumstances:
- where an employer ceases to carry on the business or to carry on the business at the place where the employee works; or
- where the employer's need for employees to perform a particular kind of work has diminished or is anticipated to diminish.
In simple terms, redundancy is about need for work, not about individual performance. If there is less work to do, fewer roles are needed and the employer genuinely needs to reduce its workforce, a redundancy situation may exist.
When Redundancy Can Occur
Examples of genuine redundancy situations include:
- closure of all or part of a business;
- organisational restructuring;
- technological change that removes the requirement for certain roles;
- loss of contracts or significant changes to business operations.
Even where a role appears to continue, a redundancy may still arise if the overall requirement for that work has diminished and fewer employees are needed.
Who Has Redundancy Rights
Not all individuals working under a contract have redundancy rights. Only employees (not self-employed individuals or most agency workers) have statutory redundancy rights, including redundancy pay and consultation entitlements. Employees on fixed-term contracts and part-time employees generally count as employees for redundancy purposes, provided their contracts meet the statutory test.
Redundancy Selection and Fairness
If more than one employee is at risk of redundancy, an employer must use fair and objective selection criteria. Typical criteria include skills, qualifications, experience, performance and length of service. Employers should avoid discriminatory criteria that relate to protected characteristics (such as age, sex, disability or pregnancy). Choosing someone for redundancy for discriminatory reasons or because they have exercised employment rights (for example, taken maternity leave or complained about unlawful practices) can make the dismissal automatically unfair.
Voluntary Redundancy
Employers may offer voluntary redundancy schemes, but participation must be genuinely voluntary. Employers should ensure that voluntary offers are available to all eligible employees and do not mask discriminatory selection.
Consultation Requirements
An employer proposing redundancies must consult with affected employees. Consultation should begin early and should be meaningful, allowing employees to ask questions, make representations, and discuss alternatives to redundancy. When 20 or more employees are being made redundant at one establishment within a 90-day period, statutory collective consultation rules apply, including minimum consultation timeframes and involvement of employee representatives or trade unions.
Poor or superficial consultation can render a redundancy unfair.
Notice and Suitable Alternative Employment
Employees are entitled to a notice period before redundancy takes effect. The statutory minimum notice period depends on length of service. Where a suitable alternative role is available within the business, an employer should offer it to the employee. If the employee unreasonably refuses a suitable alternative, their entitlement to redundancy pay may be affected.
Redundancy Pay
Employees with at least two continuous years of service are generally eligible for statutory redundancy pay. The amount is based on age, length of service and weekly pay, subject to statutory caps. Employers may offer enhanced redundancy pay under contractual terms that go beyond statutory minimums. Redundancy pay up to £30,000 is generally tax-free.
Redundancy pay is distinct from notice pay and holiday pay, which may also be payable on termination.
Appealing Redundancy Decisions
If employees believe the redundancy decision was unfair - for example, because the selection process was discriminatory, the consultation was inadequate, or the redundancy was not genuinely required - they should raise a grievance with the employer and, if necessary, use the employer's appeal process. Written appeals should set out why the decision is believed to be flawed.
Employment Tribunal Claims
Employees may take a claim to an employment tribunal if they believe they have been unfairly dismissed by reason of redundancy. Key time limits apply:
- claims for statutory redundancy pay must generally be presented within six months from the effective date of termination;
- claims for unfair dismissal or discrimination typically must be brought within three months (less one day) of the dismissal date, subject to possible extensions through Acas Early Conciliation.
Tribunals will assess whether the redundancy was genuine and whether the employer followed a fair process. Remedies may include awards for loss of earnings, redundancy pay, and compensation for procedural failings.
Practical Steps for Employees
Employees facing redundancy should consider the following actions:
- request written information about why the redundancy is proposed, the selection criteria and any available alternatives;
- engage constructively in consultation meetings;
- check whether the notice period and redundancy pay offered comply with statutory and contractual entitlements;
- use the employer's appeal process if available;
- seek independent advice from Acas, Citizens Advice or a qualified solicitor;
- if necessary, start Acas Early Conciliation before making a tribunal claim to preserve legal rights.
Final Thoughts
Redundancy in UK employment law describes a specific form of dismissal arising from diminishing business need for roles. Employees have statutory rights designed to ensure fair treatment, including consultation, fair selection, notice, and redundancy pay. Employers must follow lawful procedures, and failures can lead to claims in an employment tribunal. Understanding these rights and the statutory framework helps employees navigate redundancy and consider appropriate steps if they believe their dismissal was unfair.
