Redundancy
True redundancy is about the disappearance of a role, not the performance of an individual. Confusing the two is the most common mistake employers make. If you are restructuring, strict adherence to statutory procedure is your only defense against a tribunal
Redundancy
The Position, Not The Person
Redundancy is costly and stressful for everyone involved. The most important rule to remember is that redundancy is about the work requirements of the employer, not the performance of the individual.
You cannot make a person redundant because of poor performance without first going through a disciplinary procedure.
The Calculations
Pay & Qualifications
Statutory redundancy pay is calculated based on number of completed years served, age and salary
Caps
The cap varies each year by government. For 2025/26 this is £719/week
Tax Free
The 1st £28,000 redundancy pay is tax fee. Staff must have 2 years service or more to be eligible for redundancy pay
* Statutory figures are revised annually in February/April.
Critical Process
6 Points to Bear in Mind
When embarking on a redundancy programme, missing a single procedural step can lead to an unfair dismissal ruling. Make sure your policies are reviewed and stay current.
1.
Written Details: It is a criminal offence to fail to give written details of the redundancy pay calculation to the employee.
2.
The Process: You must explain the selection process and give a chance to appeal, otherwise it is automatically unfair.
3.
Part-Time Workers: It is illegal to select part-time workers first merely because they are part-time.
4.
Insolvency: If the employer is insolvent, statutory pay can be claimed from the state via a lengthy process.
5.
Tribunal Test: A tribunal won’t substitute its own view, but will judge if your selection was one a “reasonable employer acting reasonably” would make.
6.
Large Scale: If more than 20 people are involved, special consultation rules apply. If closing down, you must consult on both the closure AND the redundancies.
Get Expert Help
Don't Face This Alone
Redundancy is legally complex and emotionally draining. If you are concerned about tribunal cases or how a redundancy programme affects you, let us help you save money, time, and stress.
Recommended Further Information
Handling redundancy correctly is critical for SMEs in Finchley, London, and the Home Counties to avoid costly unfair dismissal claims.