Employees made redundant may be entitled to statutory redundancy pay and, in some cases, a higher contractual payment. Where a redundancy dismissal is unfair or discriminatory, they may also have an unfair dismissal and/or discrimination claim. Different time limits apply depending on the type of claim.
The time limit to bring a claim for statutory redundancy pay to an employment tribunal is 6 months minus 1 day from the date your job ends (the effective date of termination).
An unfair dismissal claim arising from redundancy must normally be brought before an Employment Tribunal within 6 months less one day of the effective date of termination, where that date falls on or after 1 October 2026. Where the effective date of termination falls before 1 October 2026, the previous time limit of 3 months less one day continues to apply.
For discrimination claims, the time limit is 6 months less one day from the discriminatory act where that act occurred on or after 1 October 2026. Where the act occurred before that date, the previous time limit of 3 months less one day applies. Where discriminatory conduct extends over a period, time runs from the end of that period, and the 6-month limit applies if the period ends on or after 1 October 2026.
Claimants must (unless exempt) notify Acas and obtain an early conciliation certificate before commencing Employment Tribunal proceedings. Provided Acas is notified before the applicable tribunal time limit expires, the time limit is paused during early conciliation, which can last up to 12 weeks. The claimant will then have at least one month from receiving the certificate to present their claim.
Definition of Redundancy
There are three main redundancy situations:-
- Closure of the entire business
- Closure of the branch where the employee works. Should the employee be offered suitable alternative employment at a different location, such an offer needs to be considered seriously as unreasonable refusal of such an offer could lose them their redundancy pay. Furthermore, should the employee have a mobility clause in their contract (e.g. requiring them to relocate to premises within a reasonable travelling distance of their home) and they refuse a reasonable instruction to relocate, they could potentially be dismissed for misconduct instead of redundancy. An employer must act reasonably when relying on a mobility clause, for example by giving the employee reasonable notice of the move.
- Workforce reduction is the usual form of genuine redundancy. However, where a job has been altered or modernised (e.g. by technology), the redundancy may not necessarily be genuine. The question is whether the employer’s need for employees to carry out work of a particular kind has ceased or diminished, or is expected to do so. For example, simply requiring an employee to adapt to a new computer system does not, in itself, create a redundancy situation, whereas technological changes that eliminate the need for their existing role may do so. Employing an immediate direct replacement to carry out substantially the same work may indicate that the redundancy is not genuine.
Entitlement to Redundancy Pay
Those made redundant are entitled to statutory redundancy pay at the very least in the following circumstances (they may be entitled to more than the statutory minimum under their contract of employment):-
- Made redundant
- Have 2 years continuous service
- Worked as an employee.
- No unreasonable refusal of suitable alternative employment. Those who unreasonably refuse an offer of suitable alternative employment will lose their statutory redundancy pay. For an offer of alternative employment to be valid, it must be made before the old job ends and must either begin forthwith or within four weeks of the old job ending. Employees are entitled to a statutory 4-week trial period where the terms of the new job differ from the old one. Should the employee reasonably decide to leave during the trial period because the alternative employment is unsuitable, then they can still claim their redundancy pay. There is no statutory definition of ‘suitable alternative employment’ or ‘unreasonable refusal’ of it, although the burden of proof is on the employer to prove both. The criteria relating to ‘suitability’ include pay, location, status, hours, etc and those relating to ‘reasonable refusal’ depend on individual circumstances (e.g. domestic circumstances).
- Special rules re lay-off and short-time: Those in a contract which provides for temporary lay-off without pay or to be placed on short-time causing a reduction in pay may claim redundancy pay if laid off or placed on short-time on less than half a week’s pay for 4 consecutive weeks or for 6 weeks within a 13-week period. To claim, the employee must give the employer written notice of intention to claim within four weeks of the last qualifying lay-off or short-time week and must then follow the statutory procedure for terminating their employment, which allows the employer an opportunity to contest the claim.
The Statutory Redundancy Payment: How Much?
The amount of statutory redundancy pay an employee is entitled to is calculated by multiplying the number of weeks which can be taken into account by a week’s pay calculated under the statutory rules, subject to a maximum of £751.00 per week. The number of weeks which can be taken into consideration depends on how long the employee has been continuously employed by their employer and how their years of continuous service relate to certain age bands. For each complete year of continuous service under the age of 22, they will receive half a week’s pay. For each complete year of continuous service between the ages of 22 and 40, they will receive one week’s pay. For each complete year of continuous service between the ages of 41 and above, they will receive 1½ weeks’ pay. The maximum number of years which can be taken into account is 20. Accordingly, the maximum statutory redundancy payment is £22,530.00 (i.e. 20 x £751.00 x 1.5)
Redundancy Solicitors: Unfair Dismissal
Redundancy dismissals in certain circumstances can be automatically unfair. (See section on automatically unfair dismissals). Alternatively, they may be unfair for one or more of the following reasons:-
- Redundancy not genuine: e.g. a direct replacement recruited immediately to carry out substantially the same work, where there has been no reduction in the employer’s staffing requirements.
- No consultation: Where the employee has not been properly consulted, then the redundancy dismissal is likely to be unfair. Proper consultation includes notifying the employee in advance that their position is at risk of redundancy, holding a meeting to discuss the potential redundancy, looking at ways of avoiding the redundancy such as suitable alternative employment, explaining the selection criteria and procedure, providing an opportunity to appeal should the redundancy proceed, etc. In a collective redundancy situation, where the employer proposes to dismiss 20 or more employees at one establishment within 90 days, the employer must follow a fair procedure and must adhere to special rules requiring collective consultation with trade union or employee representatives. Failure to comply with the latter may result in an Employment Tribunal making a ‘protective award’ of up to 180 days’ pay for each affected employee for dismissals taking effect on or after 6 April 2026 (90 days’ pay for earlier dismissals). Failure to consult may also be relevant to whether the dismissals were fair. Furthermore, even in a collective redundancy situation where consultation has taken place with a union or employee representatives, individual consultation is important as individual employees usually like to make representations on their own behalf.
- Unfair selection: Discriminatory selection, if it occurs at all, usually occurs at this stage (e.g. highlighted when comparing the composition of the redundant group to the retained one). The criteria for selection should ideally be agreed with any union and/or employee representatives and multiple selection criteria are usually adopted which often includes time-keeping, employee adaptability, length of service, productivity, future requirements, etc.
- Failure to offer suitable alternative employment: Employers are under an obligation to determine whether there is any suitable alternative employment within the company or group available to employees being considered for redundancy. Full details should be provided by the employer to the employee of any alternative positions they offer and the employee should be allowed a statutory 4-week trial period where the terms of the new job differ from the old one. Should the employee unreasonably refuse an offer of suitable alternative employment, they will lose their statutory redundancy pay. Such refusal may also affect an unfair dismissal claim or any compensation awarded.
