When Does Redundancy Become Unfair Dismissal?

Redundancy is a potentially fair reason for dismissal under UK employment law. However, not every dismissal labelled as redundancy is legally fair. Even where a genuine redundancy situation exists, the dismissal may still amount to unfair dismissal if the employer fails to follow a fair process.

In England and Wales, unfair dismissal claims are governed primarily by the Employment Rights Act 1996. Employment tribunals assess both the reason for dismissal and the procedure used. A redundancy dismissal can therefore be lawful in principle but still unlawful in practice if handled incorrectly.

This article explains when redundancy becomes unfair dismissal, how tribunals assess fairness, and what legal protections apply.

Legal framework: redundancy and unfair dismissal

Under section 98 of the Employment Rights Act 1996, redundancy is a potentially fair reason for dismissal. However, fairness is assessed under section 98(4), which requires tribunals to consider whether:

• the employer acted reasonably in treating redundancy as sufficient reason for dismissal
• the dismissal was within the range of reasonable responses
• a fair procedure was followed

This means redundancy must be both genuine and fairly handled to avoid an unfair dismissal finding.

When redundancy becomes unfair dismissal

A redundancy dismissal may become unfair in several key situations:

1. No genuine redundancy situation exists

If the employer claims redundancy but the role still exists, tribunals may find the dismissal unfair.

Examples include:

• replacing the employee immediately after dismissal
• the role continuing unchanged under a different title
• no reduction in workforce or workload

If the need for the role has not genuinely ceased or reduced, redundancy is not established.

2. Unfair selection process

Even where redundancy is genuine, selecting the employee unfairly can make the dismissal unlawful.

Common issues include:

• subjective or biased scoring systems
• failure to use a proper selection pool
• targeting specific employees without objective criteria
• inconsistent application of selection rules
• discrimination in selection decisions

Tribunals expect selection to be based on transparent, measurable, and consistently applied criteria.

3. Lack of meaningful consultation

Consultation is a core requirement in redundancy law. A dismissal may be unfair if consultation is:

• absent or superficial
• carried out after decisions have already been made
• not genuine or open to influence

Employers must consult individually and, where applicable, collectively before final decisions are taken.

Failure to consult properly is one of the most common grounds for unfair dismissal findings.

4. Failure to consider suitable alternative employment

Employers are expected to explore whether alternative roles exist within the organisation.

A redundancy dismissal may be unfair where:

• suitable roles were available but not offered
• employees were not informed of alternatives
• no proper assessment of redeployment was carried out

Tribunals expect employers to actively consider alternatives rather than simply proceed to dismissal.

5. Discriminatory redundancy selection

Redundancy becomes automatically unfair if it is influenced by a protected characteristic under the Equality Act 2010, including:

• age
• disability
• sex
• race
• pregnancy or maternity
• religion or belief
• sexual orientation
• gender reassignment

Indirect discrimination can also make a redundancy dismissal unlawful if neutral criteria disproportionately disadvantage a protected group without justification.

6. Breach of statutory procedure or contractual process

Dismissal may be unfair where employers fail to follow:

• internal redundancy policies
• contractual consultation procedures
• agreed redundancy selection frameworks
• statutory collective consultation rules (where applicable)

In large-scale redundancies, failure to comply with collective consultation obligations can also result in protective awards.

7. Poor or unreasonable handling of redundancy process

Even if individual steps are taken, the overall process may still be unfair if it lacks reasonableness.

Examples include:

• rushing the process without adequate time for consultation
• failing to provide employees with information needed to respond
• ignoring employee suggestions or objections
• predetermined outcomes

Tribunals assess fairness holistically rather than mechanically.

What tribunals consider when assessing fairness

Employment tribunals apply a “range of reasonable responses” test. They ask whether a reasonable employer could have acted in the same way.

Key factors include:

• size and resources of the employer
• complexity of the redundancy situation
• clarity of selection criteria
• quality of consultation
• evidence of fair consideration of alternatives
• consistency in decision-making

Tribunals do not decide what they would have done; they assess whether the employer's actions were reasonable.

Automatically unfair redundancy dismissals

Some redundancy dismissals are automatically unfair, meaning no qualifying service is required to bring a claim. These include dismissals linked to:

• pregnancy or maternity leave
• whistleblowing
• trade union membership or activities
• asserting statutory employment rights
• health and safety activities

In these cases, fairness of procedure is not sufficient to justify dismissal.

Consequences of unfair redundancy dismissal

Where redundancy is found to be unfair, tribunals may award:

• compensation for loss of earnings
• basic award (linked to age, pay, and length of service)
• injury to feelings (in discrimination cases)
• reinstatement or re-engagement (rare but possible)

Compensation is assessed based on actual financial loss and statutory guidelines.

Time limits for bringing a claim

Unfair dismissal claims must generally be brought within:

• three months less one day from the date of dismissal

Before submitting a claim, employees must complete ACAS early conciliation. Failure to act within the time limit usually prevents the claim from proceeding.

Practical indicators of unfair redundancy

Redundancy is more likely to be challenged successfully where:

• the role is still being performed after dismissal
• only one employee is selected without objective justification
• consultation meetings are brief or predetermined
• scoring systems are unclear or undocumented
• alternative roles are not explored

These indicators often form the basis of tribunal claims.

Practical steps for employees

Where redundancy appears unfair, individuals commonly:

• request written reasons for selection
• ask for scoring matrices and selection criteria
• review consultation documentation
• compare treatment with other employees
• raise internal grievances
• seek early conciliation through ACAS

These steps help establish whether legal action is viable.

Key Takeaways

Redundancy becomes unfair dismissal when the employer fails to follow a fair and reasonable process, even if a redundancy situation exists. Key risks include lack of genuine redundancy, unfair selection, inadequate consultation, failure to consider alternative employment, and discrimination.

Employment tribunals assess both the reason for dismissal and the fairness of the procedure. A lawful redundancy must therefore be both substantively justified and procedurally fair.