What is redundancy?

A redundancy situation is where the employer no longer requires workers of a particular kind, for example where the job disappears or the workplace closes.

Definition of redundancy

The legal definition of redundancy in the Employment Rights Act 1996 says that a redundancy exists where the dismissal of an employee is wholly or mainly attributable to the fact that the employer:

  • has stopped, or intends to stop, business for the purpose of which the employee was employed, or
  • has stopped, or intends to stop, business at the location where the employee was employed, or
  • no longer requires employees to carry out work of a particular kind, or
  • no longer requires employees to carry out work of a particular kind at the place the employee was employed.

Redundancies are likely to occur where there is a closure of a business or workplace, or a diminishing need for employees to do the work.

In addressing whether there is a redundancy situation, the tribunal has to consider the employer’s requirements for someone to do the job the employee was employed to do.

The fact that the work may still exist is not necessarily the issue, but rather whether the employer decides to have it done.

Where the work continues to be done but is shared out between other employees there can still be a redundancy situation, because there will be a need for fewer employees.

Fixed-term contracts

When a fixed-term contract comes to an end it will be a redundancy if the reason for the non-renewal of the contract is that there is no longer any need for an employee to do that work.

For example, the end of a one-off project would be a redundancy situation, but if a maternity leave locum post comes to an end it would not be a redundancy situation because there is no reduction in the requirement for an employee.