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When can your employer make you redundant

About redundancy

On this page, we tell you:

  • what redundancy is
  • in which situations you can be made redundant
  • in which situations you might not be actually redundant, even though your employer says you are
  • what happens if you've been put on short-time working or laid off.

There are other pages on this site which also tell you about redundancy. These are:

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What is redundancy

Redundancy is a form of dismissal. It's where you are dismissed because the work you did is no longer needed, for example, if your employer goes out of business.

An employer may tell you you've been laid off, meaning you've been made redundant. But technically a lay-off is something different.

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What counts as redundancy

Situations where you can be made redundant include:

  • your employer’s business, or part of the business, has stopped operating or has gone bust (become insolvent)
  • your employer’s business is failing
  • your employer is moving into a new line of business which no longer needs your skills
  • a new system or technology is being introduced which means your job is no longer necessary
  • your job no longer exists because the work is being done by other people, following a reorganisation of the workplace
  • your employer’s business, or the work you are doing, moves to another area
  • your employer's business is taken over
  • your employer was the sole owner of the business and they die.

Your skills are no longer needed

You can be made redundant if your employer is moving into a new line of business which no longer needs your skills.

Example: Alex was employed as a skilled joiner to help make racing yachts. He was made redundant when the employer changed the business to dinghies made from fibre-glass. The employer was still in the business of boat building, but he no longer needed the skills of a joiner because the fibre-glass was moulded. This was a genuine redundancy.

Even if there is other work available for you to do in the company, you will still be redundant. It's the fact that there is no need for the work you were employed to do which makes you redundant, regardless of whether other work is available. However, if you are made redundant, your employer should offer you suitable alternative work wherever possible.

Reorganisation of the workplace

You may be made redundant if your employer reorganises the business to improve its efficiency, or brings in new technology so that fewer people are needed to do the same amount of work.

You may also be made redundant if a new process or system is introduced which means that your job is no longer needed. However, you won't always be redundant just because a new process or system has been introduced. Some new systems or technology may just mean that the same job can be done differently, rather than replacing jobs or creating a different job. If this is the case, you shouldn't be made redundant.

Sometimes, a reorganisation of the workplace or introduction of new technology mean that the tasks you would normally do are given to other people. If this means that the job you were doing no longer exists, your employer can make you redundant.

Example: Our work place has been re-organised. Someone else is now doing all the work that I used to do, on top of all their own work and I'm being made redundant. Can our employer treat us like this?

If the work you were doing is no longer available for you to do, your employer is allowed to make you redundant. If you and your colleagues are union members, you should talk to your union rep about the problem. Or go to your local CAB.

Even if there is other work available for you to do in the company, you will still be redundant. It's the fact that there is less need for the work you were employed to do which makes you redundant, regardless of whether other work is available. However, if you are made redundant, your employer should offer you suitable alternative work wherever possible.

Your employer moves their business to another area

Your employer may move their business to another area. You can be made redundant if your employer stops carrying on business in the place where you were employed to work.

Your employment contract may say you have to work anywhere the employer asks you to. This is called a mobility clause. However, even if you have a mobility clause, you can still be made redundant if the business moves and you aren't able to move to the new area. For example, it may not be practical for you to move a long way from home if you have childcare responsibilities. This is a complicated issue.

If you are being made redundant because your employer is moving the business, you should seek the help of an experienced adviser, such as at a Citizen's Advice Bureau. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

Your employer's business is taken over

Where a business is transferred from one employer to another, this doesn't automatically mean that you are redundant. Your employment contract will continue and you will keep the same terms and conditions of employment with your new employer. This is known as protection under the Transfer of Undertakings (Protection of Employment) Regulations, also referred to as 'TUPE'.

However, there are circumstances where you could get made redundant because of the transfer. This could either be by your old employer before the transfer takes place, or by your new employer after the transfer has happened. Your employer would have to show that:

  • you were genuinely redundant, because there’s no longer any need for the work you were doing, and
  • the transfer itself was not the only, or main reason, for your redundancy.

It is quite common for employees to be dismissed unfairly when a business is taken over so if you're made redundant when a business is taken over, you should get expert advice urgently.

If you are being made redundant because the business is being taken over, you should seek the help of an experienced adviser, such as at a Citizen's Advice Bureau. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

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Lay-offs and short-time working

If your employer does not have enough business for the workforce, they might lay you off.  Most people's contracts don't allow for lay offs, so if you are laid off you won't get paid. Your employer may not actually tell you that you're being laid off but may say, for example, that you must take some unpaid holiday as there is not enough work for you to do. This is still a lay-off, even if you employer doesn't call it that.

If your employer does not have enough business for the workforce, they might put you on short-time working. This means you work shorter hours than usual and, as a result, your pay is less than half a normal week's pay.

Your employer may lay you off or put you on short-time working as an alternative to redundancy. What you can do about this situation depends on what your contract of employment says.

Your contract of employment says you can be laid off or put on short-time working

If your contract of employment allows for lay-off or short-time working, you may be able to claim that you've actually been made redundant if you've been laid off or put on short-time working (or a mixture of both) for either:-

  • four, or more, consecutive whole weeks; or
  • six whole weeks, where no more than three weeks are consecutive, in any thirteen-week period.

There are special procedures to claim redundancy in these circumstances. For example, you must give the employer written notice that you intend to claim a redundancy payment.

If you are in this situation, you will need expert advice about the procedure to follow. You can seek expert advice at a Citizens Advice Bureau. They will also be able to give you advice about other help you can get if you are in this situation. To search for details of your nearest CAB, including those which can give advice by e-mail, click on nearest CAB.

If you follow all the steps to claim a redundancy payment, you can take a claim to an employment tribunal if:

  • your employer argues that you are not entitled to redundancy payment, or
  • your employer doesn't argue that you not entitled to redundancy pay but simply does not pay the redundancy pay.

If you need to take a claim to the employment tribunal, you should seek the help of an experienced adviser, such as at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

The contract does not allow for lay-off/short-time working

If your contract does not allow for lay-off or short-time working, you can't claim redundancy but you may have other options, for example, you may be able to claim unfair constructive dismissal.

For more information about what your options are if you are in this situation, you should seek the help of an experienced adviser, such as at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

Working while laid off or on short-time working

You can usually take up other work while you are laid off or on short time working, as long as your contract does not stop you doing this. However, you should not take up any work which might be against your employer's interests, for example, by working for a competitor.

If you want to work while you are laid off, you should let your employer know and get their agreement. You should also make sure that you are able to return to your normal job as soon as your employer is able to offer you work again. If you don't do this, your employer may argue that you have resigned by taking up other work. This means that your employer may not let you return to your normal job, or may not pay you redundancy pay under the special procedures.

For more information, or if you are having problems with working while laid off or on short time working, you should seek the help of an experienced adviser, for example at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

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What doesn't count as redundancy

You are not always legally redundant just because your employer says you are. The following are situations where you might not actually be redundant.

Unfair dismissal

Your employer might claim that you're redundant, when in fact they have unfairly dismissed you. This may be so they don't have to pay you compensation for unfair dismissal. You should look carefully at the circumstances surrounding your dismissal to make sure that you are really being made redundant.

The following situations are examples of where the real reason for your dismissal might not be redundancy:

  • your employer has recently taken on other people. This could mean that there has not been a reduction in the amount of work to be done
  • you're the only person being made redundant, or one of only a few in a large company. This might be a sign that the type of work you do is still needed
  • you had a bad relationship with your employer. This might be a sign that you have been dismissed for a reason other than the need to reduce the workforce
  • you have experienced discrimination at work.

If you don't really think you've been made redundant when your employer says you have, you may be able to make a claim to an employment tribunal for unfair dismissal, discrimination, or both.

If you need to take action against your employer, you should seek the help of an experienced adviser, such as at a Citizen's Advice Bureau. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

Discrimination

There may be circumstances where a discriminatory dismissal is disguised as a redundancy. For example, you may have really been dismissed because:

  • you're pregnant
  • you're a woman
  • you’re from an minority ethnic community
  • you’re disabled
  • you're gay
  • you’re of a particular religion
  • you're perceived to be lesbian or gay.

Example: I'm a Bangladeshi Muslim and I work as a cleaner in a care home. They are reorganising the shift patterns and have said I'm being made redundant. I'm the only person from my community working there and no one else is being made redundant. Can they do this?

It could be that your dismissal is not a real redundancy and you've been dismissed because of both religious and racial discrimination. Get urgent advice about what to do.

Although an employer is allowed to choose people for redundancy based on how long you've been working for them, they must be able to justify any criteria that they use which relate to age or length of service. If you've been made redundant and you’re older or younger than the rest of the workforce, this could potentially be a sign of discrimination.

Resignation

Redundancy is a sort of dismissal. This means that if you haven't been dismissed, you haven't been made redundant. For example, if you resigned, you haven't been dismissed and so you can't claim redundancy rights and redundancy pay.

There is an exception to this rule if you've been put on short-time working or laid off and have to follow certain procedures to claim redundancy. These involve you in resigning.

If you've been put on short-time working or laid off and you want to claim redundancy, you should seek the help of an experienced adviser, such as at a Citizen's Advice Bureau. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

If you volunteer for redundancy, this doesn't mean you have resigned from your job. It will still count as redundancy and you will be entitled to redundancy rights.

In some cases, an employer may want to get rid of your job without having to give you your redundancy rights. They could treat you so badly that you have to leave. If you've been forced to resign because of these reasons, this is called constructive unfair dismissal. You could make a claim to an employment tribunal for constructive unfair dismissal. If you were successful, this would mean you’d get compensation similar to a redundancy payment.

It's difficult to prove constructive unfair dismissal and you must get advice, if possible, before you resign. You should seek the help of an experienced adviser, such as at a Citizen's Advice Bureau. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

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