Facing Redundancy? Know Your Rights and Entitlements
Redundancy can be a stressful experience — but you have important rights that protect you. Whether your employer is downsizing, closing, or restructuring, this guide explains what redundancy means, the legal process, and what you’re entitled to in England and Wales.
What is redundancy?
Redundancy is a form of dismissal when your employer needs to reduce their workforce. It must be due to one of the following:
- Closure of the business or workplace
- Fewer employees needed for a particular type of work
- Changes in how or where work is done
It’s not redundancy if you’re being dismissed for performance, misconduct, or personal issues — in those cases, different rules apply.
When is redundancy fair?
For a redundancy to be fair, your employer must:
- Have a genuine redundancy reason
- Follow a fair process
- Consult with you before making a decision
Fair process includes:
- Warning you about possible redundancy
- Explaining the reasons and selection criteria
- Consulting with you (individually or collectively)
- Considering suitable alternative employment
- Allowing you to appeal the decision
If your employer fails to follow this process, your redundancy may be unfair — even if there was a genuine need for job cuts.
Selection criteria
Employers must use objective and fair criteria when deciding who is at risk. Examples include:
- Skills and qualifications
- Performance or productivity
- Attendance record (excluding disability-related absences)
- Disciplinary record
Selection based on age, gender, race, disability, pregnancy, or part-time status is discriminatory and unlawful.
Consultation requirements
Individual consultation
Required in all redundancy situations. You must be told:
- Why your job is at risk
- How you’ll be selected
- What alternatives are being considered
- Your right to appeal
Collective consultation
Applies if 20 or more employees are being made redundant at one workplace within 90 days. The employer must:
- Consult employee representatives (e.g. a union)
- Begin consultation at least:
- 30 days before the first dismissal (for 20–99 employees)
- 45 days before the first dismissal (for 100+ employees)
Redundancy pay
Statutory redundancy pay
If you’ve worked for your employer for at least 2 years, you’re entitled to statutory redundancy pay, based on:
- Your age
- Length of service (capped at 20 years)
- Weekly pay (capped at £700/week as of April 2025)
You get:
- 0.5 week’s pay for each full year under age 22
- 1 week’s pay for each full year aged 22–40
- 1.5 weeks’ pay for each full year aged 41 and over
Your employer may offer enhanced redundancy pay — check your contract or redundancy policy.
Notice pay
You’re also entitled to notice of redundancy, or pay in lieu:
- 1 week’s notice if employed 1 month–2 years
- 1 week per full year of service (up to 12 weeks)
Alternative employment
Your employer must try to offer suitable alternative roles. If they do and you unreasonably refuse, you may lose your right to redundancy pay.
You have the right to a 4-week trial period in the new role.
Time off to look for work
If you’ve been employed for 2+ years, you’re entitled to reasonable paid time off to:
- Attend job interviews
- Look for a new job
- Arrange training
Unfair redundancy
You may have a claim for unfair dismissal if:
- The redundancy was not genuine
- The selection process was unfair or discriminatory
- There was no consultation
- You weren’t offered suitable alternative work
Claims must be made within 3 months less one day of your dismissal. Start with ACAS Early Conciliation.
Tax on redundancy pay
- Statutory and most non-contractual redundancy pay is tax-free up to £30,000
- Pay in lieu of notice (PILON) and holiday pay are usually taxable
Getting advice
Redundancy law is complex. For help understanding your rights, contact:
- ACAS
- Citizens Advice
- Trade unions
- Employment solicitors
Disclaimer
This article provides general information about redundancy law in England and Wales as of April 2025. It is not legal advice, and laws can change. Your individual circumstances may affect how the law applies to your situation.
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