Overview

Redundancy arises in only three, very narrowly defined, circumstances – when there has already been, or is going to be, either:

  1. a business closure, or
  2. a workplace closure, or
  3. 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.

Q: When does a redundancy situation arise?

What procedure should be followed in a redundancy situation?

Should all employers have a formal redundancy procedure?

Do employers have to make the same redundancy payments as in previous redundancy exercises because they are now an implied contractual term?

What is individual consultation?

Does an employee have a right to be accompanied by a colleague or a trade union representative?

What are the common selection criteria and how should they be applied?

Q: Should the 'Last in First out' (LIFO) method or any other criteria related to length of service be used as a criteria for redundancy selection?

Q: Is a voluntary redundancy a resignation and do volunteers have to be included in the calculation of the number of employees being made redundant?

Q: In a redundancy situation how should an employer determine the initial selection pool?

Q: Can an employer implement redundancies by ‘bumping’, that is by dismissing someone else so that their job can be given to the redundant employee?

Q: Once employees have been selected for redundancy can they appeal?

Q: What reasons must not be used as a basis for redundancy selection?

Q: Can an employee who is pregnant or on maternity or paternity leave be placed in the pool for selection for redundancy in the same way as other employees?

Q: Should a redundant employee be offered a suitable alternative job?

Q: How do statutory trial periods operate in a redundancy situation?

Q: Can part-time employees be dismissed by reason of redundancy if they cannot work full-time and the employer wants a full-time employee?

Q: Can an employer consult about a variation of contract, such as a reduction in hours and if the employees do not agree dismiss them and then re-engage on new terms instead of making redundancies?

Q: What is short-time working as an alternative to redundancies?

Q: What are the consequences if the redundancy dismissal is not carried out fairly?

Q: Can an employee resign once they are served with a redundancy notice and if they do so will they lose the right to statutory redundancy pay?

Q: How does an employee qualify for a statutory redundancy payment and how is it calculated?

Q: What is the 'obligatory period' and what is its impact on entitlement to redundancy pay?

Q: How are employers' own enhanced redundancy payments affected by age discrimination legislation?

Q: Is a redundant employee entitled to a period of notice as well as a redundancy payment and can they be placed on garden leave during any notice period?

Q: Are employees entitled to time off to seek alternative employment during their notice period following a dismissal by reason of redundancy?

Q: Should employees with less than two years’ continuity of employment be included in a redundancy consultation?

Q: Should employee shareholders be included in a redundancy consultation?

Q: Can an employer make employees redundant if they refuse to move locations?

Q: Are there any future developments expected in the area of redundancy?

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Case law on redundancy

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