Redundancy arises in only three, very narrowly defined, circumstances – when there has already been, or is going to be, either:
- a business closure, or
- a workplace closure, or
- the employer’s circumstances have changed and there is a reduction or proposed reduction in the need for employees.
If, and only if, one of these situations has arisen will the redundancy be a genuine one. Confusion often arises because ‘making someone redundant’ is often used as a euphemism for dismissals in other situations.
The definition of redundancy for redundancy payment purposes is that ‘an employee is dismissed by reason of redundancy if the dismissal is attributable to the fact that:
- the employer has ceased, or intends to cease, to carry on the business (for the purposes of which the employee was employed), or
- the employer has ceased, or intends to cease, to carry on that business in the place where the employee was employed, or
- the requirements of that business for employees to carry out work of a particular kind in the place where the employee was employed, have ceased or diminished or are expected to cease or diminish.’
The definition used for the purposes of consultation with employees is wider and would include, for example, a reorganisation where there is no reduction in the overall numbers. Selecting roles for redundancy may also pose problems for employers.