When is redundancy unfair dismissal?

Man looking pensive

Your employer may have advised you that you are being made redundant which can be a worrying and anxious time.

In order for your employer to do this, this should be a genuine redundancy situation for the redundancy to be fair.

How do you know if the redundancy is fair?

The redundancy situation would be fair if there is a legitimate business reason for your job coming to an end. Examples could be as follows:

  • The business is not performing well
  • Your job is no longer required i.e. they have technology to do your job now
  • Part of the business has stopped operating
  • There has been a business reorganisation and your job has been absorbed into another job role
  • The business relocates
  • The business is taken over by another company

If you doubt any of the reasons your employer is saying to you about why your role has been made redundant, you may find that there is not a genuine redundancy situation and legally speaking, you may have grounds to challenge this.

Signs of unfair redundancy

There are some telling signs that a redundancy reason is not fair. These could include:

  • The decision to make you redundant coming closely after you have made a complaint or raised a grievance
  • You feel you are being discriminated against
  • You are the only one being made redundant
  • You are not aware of any downturn in business
  • There are other suitable jobs which you could carry out for your employer

Unfair redundancy procedure

The redundancy procedure of your organisation should be clearly set out somewhere such as your employee handbook.

Your employer should have a fair process for selecting roles that are to be redundant. They must have a redundancy selection pool of employees. This may comprise several people doing the same role or there may be only one employee in the pool in certain circumstances.

They should consult individually with you and allow discussions to take place regarding the reasons for proposed redundancy, alternatives to redundancy, why you are being considered and if there are suitable alternative roles in the company.

A decision on redundancy should not be made without consulting with you. If your position is being made redundant this should be confirmed to you along with the reasons why.

You will have a right of appeal against the decision. If you are of the view that the process has not been followed fairly or accurately, you may be able to challenge this.

Examples of potentially fair and unfair redundancy

Potentially Fair – your employer consults and advises your role as PA is being made redundant due to a business downturn. You are being placed in a selection pool with other PAs and are graded based on your experience and performance. Your employer forwards the matrix to you and arranges a further consultation where you are advised that based on the matrix you are being made redundant. There are no alternative positions available. You are given a letter detailing the payments due and the appeal process.

Unfair – you have submitted a Grievance in which you allege that your employer has discriminated against you because of your age. Your employer writes to you and advises that you are being made redundant and are being replaced with someone younger.

Challenging your redundancy

In order to challenge your redundancy, there is certain criteria you must fulfil such as:

  • 2 years full service (unless in certain specific exceptions such as acts of discrimination)
  • You believe there is not a genuine redundancy situation
  • You believe that there has been an unfair procedure followed
  • You believe you have been discriminated against when reaching the decision to make you redundant
  • You have not been considered for a suitable alternative role 

Redundancy Settlement Agreement

If your employer does make the decision to make you redundant they may look to tie up the process with a Settlement Agreement.

The Settlement Agreement will be a contract between you and your employer with specific terms and conditions. The main idea of the Settlement Agreement is that in return for compensation, you agree that you will not pursue any legal rights against your employer in relation to the termination of your employment.

Your employer may offer you an enhanced redundancy payment as opposed to a statutory redundancy payment so this may be a beneficial way to handle the process of the redundancy. By doing so they may be attempting to save time and money by not following the full redundancy process.

Collective redundancy

If your employer is making 20 or more people redundant you are part of a collective redundancy. In this situation your employer has to hold a group consultation. Your employer is required to consult with your union representative or a representative from the employees. The group consultation must start at least 30 days before anyone is made redundant.

Specialist employment advice about unfair dismissal redundancy

Digby Brown are specialised in advising on all aspects of unfair dismissal in redundancy, whether it is the process or the selection or simply what you are entitled to.

Our specialist solicitors can provide you with the relevant advice you would require if you are issued with a Settlement Agreement. We understand that time can be a pressure in these situations and have the facilities to handle your case in a timely and professional manner.