When Is Redundancy Dismissal Considered Unfair?

Redundancy is a potentially fair reason for dismissal under the Employment Rights Act 1996. However, a redundancy dismissal can still be unfair if the employer does not follow a fair process, if the redundancy is not genuine, or if the employee is selected for improper reasons.

Employment Tribunals examine both the validity of the redundancy situation and the fairness of the procedure used. Even where a business need for redundancy exists, the dismissal may still be unlawful if handled incorrectly.

What Counts as Redundancy in UK Law?

A redundancy situation arises where dismissal is wholly or mainly due to:

• Closure of the business
• Closure of the workplace
• Reduced need for employees to carry out work of a particular kind
• Reduced requirement for employees to carry out work at a particular location

The employer must show that the redundancy is genuine. If the role still exists in substance or someone is simply replaced, the dismissal may not qualify as redundancy at all.

When a Redundancy Dismissal Becomes Unfair

A redundancy dismissal is commonly found to be unfair where one or more of the following issues arise.

1. No Genuine Redundancy Situation

A dismissal may be unfair if:

• The employee's role still exists in practice
• The employer hires someone else to do the same job
• Work levels have not actually reduced
• The redundancy is used as a pretext for dismissal

Tribunals look at the reality of the situation rather than the employer's description.

2. Unfair Selection for Redundancy

Even where redundancy is genuine, the selection process must be fair. Common problems include:

• Selecting employees based on personal preference rather than objective criteria
• Using unclear or subjective scoring systems
• Applying criteria inconsistently
• Targeting employees due to absence, complaints, or protected activity
• Failing to consider a proper selection pool

Selection must be based on reasonable, verifiable criteria such as skills, performance records, qualifications, and attendance (excluding protected absences such as maternity leave).

3. Failure to Consult Properly

Consultation is a central requirement in redundancy dismissals. A dismissal may be unfair if consultation is:

• Not carried out at all
• Conducted too late, after decisions are effectively made
• Not meaningful or genuine
• Done individually when collective consultation is required
• Not provided with adequate information

Employers must consult with affected employees, explain the business reasons, and allow time for feedback and alternatives.

4. Failure to Consider Suitable Alternative Employment

Employers are expected to consider whether alternative roles are available. A redundancy dismissal may be unfair if:

• Suitable vacancies exist but are not offered
• The employee is not informed of available roles
• No reasonable consideration is given to redeployment
• The employee is not given a fair opportunity to apply for internal positions

Where alternative employment exists, dismissal should be a last resort.

5. Lack of Fair Procedure

Even in a genuine redundancy, the process must be reasonable. Procedural unfairness may include:

• No warning of redundancy risk
• No individual consultation meetings
• No scoring or selection matrix
• No right of appeal
• Insufficient time to respond or challenge decisions

Tribunals assess fairness based on what a reasonable employer would do in similar circumstances.

6. Discriminatory or Protected Reason Selection

A redundancy dismissal becomes automatically unfair or unlawful if selection is based on protected characteristics or rights, including:

• Pregnancy or maternity leave
• Trade union membership or activity
• Whistleblowing
• Health and safety concerns
• Race, sex, disability, religion, or age

Even if redundancy is genuine, selection cannot be influenced by discriminatory or retaliatory motives.

7. Failure to Follow Collective Consultation Rules

Where 20 or more employees are being made redundant within a 90-day period at one establishment, employers must follow collective consultation obligations.

Failure may include:

• Not consulting employee representatives
• Not meeting statutory minimum consultation periods
• Not notifying the Secretary of State where required
• Failing to provide required information

Non-compliance can lead to a protective award of up to 90 days' pay per affected employee.

8. Inadequate or Unfair Scoring Systems

Many redundancies rely on scoring matrices. These can lead to unfair dismissal if:

• Criteria are vague or subjective
• Scores are not evidenced
• Managers apply inconsistent judgments
• Employees are not shown or allowed to challenge scores
• Bias influences scoring outcomes

Tribunals often scrutinise scoring systems closely.

9. Failure to Follow Contractual or Policy Requirements

Redundancy may also be unfair if the employer fails to follow:

• Contractual redundancy procedures
• Internal redundancy policies
• Established workplace practices

Even if statutory minimums are met, failure to follow agreed procedures can render the dismissal unfair.

How Employment Tribunals Assess Redundancy Fairness

Tribunals apply a two-stage test:

1. Was there a genuine redundancy situation?

They examine whether the legal definition of redundancy is met.

2. Did the employer act reasonably?

They assess whether the employer followed a fair process, including:

• Consultation
• Selection
• Alternatives to dismissal
• Overall fairness of decision-making

The focus is on reasonableness, not perfection.

Remedies for Unfair Redundancy Dismissal

If a tribunal finds unfair dismissal, possible outcomes include:

• Compensation (basic and compensatory awards)
• Reinstatement (return to previous job)
• Re-engagement (similar role within the business)

Compensation may include loss of earnings, future losses, and statutory redundancy pay adjustments.

Time Limits for Making a Claim

An unfair dismissal claim must usually be submitted within:

• Three months less one day from the termination date

Before lodging a claim, employees must normally complete ACAS Early Conciliation, which may pause limitation periods.

Common Situations Leading to Claims

Redundancy disputes frequently arise where:

• Employees are selected shortly after raising complaints
• A business restructures but replaces staff in similar roles
• Consultation is minimal or absent
• Employees on maternity leave are disproportionately affected
• Scoring appears inconsistent or subjective

Tribunals often focus on documentary evidence such as emails, scoring sheets, and consultation records.

Key Takeaways

A redundancy dismissal becomes unfair when the employer fails to ensure both a genuine redundancy situation and a fair process. The most common issues include poor consultation, flawed selection methods, failure to consider alternative employment, and discriminatory decision-making.

Even where a redundancy is legitimate, procedural mistakes can make the dismissal unlawful. The fairness of the process is therefore as important as the business reason behind the redundancy.

Key Takeaways

Redundancy is a valid reason for dismissal under UK law, but it must be handled correctly. A dismissal may be unfair if the redundancy is not genuine, if selection is biased or inconsistent, if consultation is inadequate, or if alternative employment is not properly considered. Employment Tribunals assess both the existence of redundancy and the fairness of the employer's actions. Where unfairness is found, compensation or reinstatement may be awarded.