Redundancy is a form of dismissal from a job, caused by the employer needing to reduce the workforce. Reasons could include:

• new technology or a new system has made the job unnecessary
• the job the worker was hired for no longer exists
• the need to cut costs means staff numbers must be reduced
• the business is closing down or moving

If the employer is making less than 20 employees redundant in one establishment it is an individual consultation.

If the employer is making 20 or more employees redundant in one establishment within a 90 day period it is a collective redundancy.
There is no time limit to how long a consultation period may last but there is a minimum period between the start of the consultation and actual dismissals. The length of the minimum period depends on the number of redundancies that the employer is proposing, if they are proposing:

• 20 - 99 redundancies, they must start the consultation at least 30 days before any dismissals take effect
• 100 or more redundancies, the consultation must start at least 90 days before any dismissals take effect

The employer should use a fair and objective way of selecting people to make redundant. This means that it should be evidence based rather than the employer deciding who they want to make redundant.
Normally a job must have disappeared for the employer to make the worker(s) redundant.
If the employer bases the redundancy selection on an unfair reason the redundancy will automatically be unfair and the worker may be able to make a claim to an Employment Tribunal for unfair dismissal.

If a method for deciding redundancies has been agreed with a trade union, the employer should follow it. Otherwise, there are some common approaches the employer could use and combine when selecting employees for redundancy.
In some cases there may be no need for the employer to follow a selection process because the group of employees to be made redundant will be clear. For example, if the employer is closing down a particular operation in a company and will have to make all the employees working there redundant.

Selection pools

One method an employer could use is to consider which group or section of the workforce the redundancies will be selected from. This is called the ‘selection pool’.
After identifying the selection pool, the employer should apply selection criteria to it, to narrow down the employees. The employer should, as far as possible, use objective selection criteria that can be applied equally and fairly across the workforce. Examples of selection criteria could be:

• disciplinary records
• experience
• capability
• relevant skills and competence

The employer cannot select people for redundancy based on the following grounds:

• gender
• marital status
• sexual orientation
• race
• disability
• religion or belief
• age
• trade union membership
• health and safety activities
• working pattern (eg part-time or fixed-term employees)

The employer must not use personal reasons for selecting workers for redundancy. If they use any of the following reasons to base their decision to making someone redundant, then the redundancy will be automatically unfair and the worker may be able to make a claim to an Employment Tribunal for unfair dismissal:

• any reason relating to maternity leave, birth or pregnancy or any other family leave, paternity leave, parental or dependants leave
• if they are disabled
• if they have transferred employers and are protected under Transfer of Undertakings Regulations (TUPE)
• membership or non-membership of a trade union
• exercising statutory rights (for example, asking for a written statement of employment particulars)
• whistleblowing (that is, making disclosures about the employer's wrongdoing)
• taking part in lawful industrial action lasting 12 weeks or less
• taking action on health and safety grounds
• doing jury service
• being a trusteeship of a company pension scheme

Statutory redundancy pay the calculation is based on:

• number of years continually employed for age
• gross weekly pay, up to a certain limit

The best way to calculate redundancy pay is to use the REDUNDACNY CALCULATOR