Redundancy - Getting it Right

by Kate Russell

Introduction

The Employment Rights Act 1996 says that an employee is dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to the fact that:

  • the employer ceases to carry on the business in which the employee was employed;
  • the employer ceases to carry on that business in the place where the employee was employed;
  • the needs of the business for employees to carry out work of a particular kind cease or diminish; or
  • the needs of the business for employees to carry out work of a particular kind in the place where the employee was employed cease or diminish.

Situations where employees can be made redundant include

  • Your business, or part of the business, has stopped operating or has become insolvent
  • Your business is failing
  • You are moving into a new line of business which no longer needs certain employees’ skills
  • A new system or technology is being introduced which means some jobs are no longer necessary
  • Some jobs no longer exist because the work is being done by other people, following a reorganisation of the workplace
  • Your business, or some of the work done, is moving to another area
  • Your business is taken over.

Note that if you don’t follow a correct procedure, you may face an unfair dismissal claim.