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Is it a true Redundancy situation?

Step 1- Is it a true redundancy situation?

If your employment started before April 2012 you acquire the right not to be unfairly dismissed after one year. If however you started working after April 2012 you will need to be employed for two years before you have the right not to be unfairly dismissed.

In order for your dismissal to be fair the Employer must show that it has one of five potentially fair reasons for dismissing you. One of those reasons is Redundancy.

There are many elements to Redundancy and establishing if your dismissal for redundancy is fair, this series of articles deals with all of the information that you may need if you find yourself in the unfortunate position of being made redundant.

When does Redundancy arise?

The law says that there are just three scenarios when a true Redundancy occurs, and this is the starting point to establish if your dismissal really is for Redundancy.

In order to constitute Redundancy your dismissal must be wholly or mainly due to:-

1)      The Employer stopping or intending to stop to carrying on business for the purpose of which you have been employed.

For example, you are employed as a bus driver and the Employer is going to stop providing bus services.

 2)      The Employer is stopping or intends to stop carrying on business in the place where you have been employed.

For example, you are employed at a factory in Manchester which is being closed and moved to London.

3)      There is a reduced requirement of the Employer to carry out work of a particular kind or a reduced requirement to do work at the place where you are employed to work.

For example, you are employed at a building site where the number of houses being built has now halved from the original number proposed, there will be a reduced requirement for employees on the site as a result.

Unless one of these scenarios exists then your dismissal will not be for Redundancy.

How do I know if one of these situations applies to me?

As you will see from the examples above the first two scenarios are fairly self-explanatory and it should be clear from the information that your Employer gives you if these apply.

Where it becomes more complicated is with the 3rd scenario, if the Employer has a reduced requirement for employees. This is the situation where it can seem unfair if you are being made redundant but others are keeping their jobs. This is examined below and the examples should help you establish if it is a true redundancy.


Has there been a reduced requirement for employees to do work of a particular kind?

1)      Requirements of the business.

The requirements of the business is a decision for the Employer, and is usually based on commercial factors. Unfortunatley the Employment Tribunal will not require the Employer to justify this decision. They will also not examine how or why these requiremenst have arisen. This means that provided it is a genuine reason for dismissal the Employment Tribunal will not intervene.

For example the business is doing well and recently receives a new contract for a large order, however your Employer decides that the business needs to be streamlined to take into account new technology and higher costs. Despite there being plenty of work available the Employer has decided that the requirements of the business are for fewer employees.

You may think that it is an unfair or unworkable decision and there should not be redundancies but unfortunately the Employment Tribunal will not interfere with the Employer’s commercial decision.

2)      Work of a particular kind

This refers to work of a particular kind rather than the particular work that you undertake. This means that it will be overall factors that will be taken into account, namely the requirements of the business as a whole.

For example the work you do may be very specific within a larger team and this work may be continuing. However if there is a reduced requirement for the work undertaken in your team it would be a redundancy.

3)      Number of Employees

It is important to note that even if the total number of employees remains the same it could still be a redundancy situation.

For Example the factory you work in loses a major order to make widgets but gets a new order to make cupcakes. There will be a reduced requirement for employees to make widgets but there is a need to recruit new staff who can make cupcakes. Therefore the number of employees remains the same, but the work of a particular kind has diminished and this would be a redundancy.

4)      Outsource work

If the Employer makes the decision to outsource the work that you do then this would be a redundancy situation, even though the work continues to be carried out.

It is important to note however that with outsourcing there may be other considerations that mean your employment actually continues with the outsourced company. Therefore if this happens to you it is important to get advice.


Stage 1- Redundancy Summary

When it comes to Redundancies it is a very emotional and stressful time, and it can be easy to become swept up in what the Employer is telling you, and therefore it is recommended that you take some time to get advice or a second opinion on what is happening.

It may seem that it is a legitimate redundancy because of what the Employer is telling you but an examination of the facts may mean that it does not meet the Stage 1 criteria.

Equally there may be occasions when you think that it cannot possibly be a redundancy, but actually the Employer has made a legitimate commercial decision which means that there is a true redundancy.

The key thing is to objectively analyse what is happening in line with the steps outlined above, and to seek advice if you are unsure, remembering that you have just 3 months to pursue a claim for unfair dismissal.

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The information contained in this blog post is provided for guidance and is a snapshot of the law at the time it is written. It is provided for your information only and should not be used as a substitute for obtaining legal advice that it specific to your particular circumstances.

The guidance should not be relied upon in any decision making process. It is strongly recommended that you seek advice before taking action.

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