Redundancy

Recent appellate guidance and legislative reform have heightened expectations around consultation quality, transparency and decision making in redundancy exercises. Failures in process, even where the underlying business rationale is sound, are increasingly being challenged.

A redundancy situation arises where an employer closes its business, closes a workplace or has a reduced requirement for employees to carry out work of a particular kind. Redundancy is a statutory concept and should not be used to address conduct or capability issues.

The primary risks include unfair dismissal claims, discrimination claims and protective awards for failure to consult collectively. Compensation exposure can be significant, particularly where group claims are brought, and mishandling redundancies can also damage morale and reputation.

Yes. Consultation must be meaningful and take place before decisions are finalised. Employers must explain proposals, listen to feedback and consider alternatives. Failure to do so is a common basis for successful claims.

Collective consultation is required where 20 or more redundancies are proposed within a 90 day period at a single establishment. This triggers obligations to consult employee representatives and comply with statutory minimum consultation periods.

Selection pools should include employees doing the same or interchangeable work. Selection criteria must be objective, measurable and consistently applied. Care is needed to avoid criteria that could be directly or indirectly discriminatory.

Yes. Employers must actively consider whether suitable alternative employment exists anywhere within the organisation throughout the redundancy process. A failure to do so is a common feature of successful unfair dismissal claims.

Yes. If redundancy selection or criteria disadvantage employees with protected characteristics, employers may face discrimination claims in addition to unfair dismissal claims. Discrimination compensation is uncapped.

Confirm the business rationale, explore alternatives to redundancy and plan consultation carefully. Taking early legal advice can significantly reduce risk and help structure a fair and defensible process.