Home Rules Employment Employing Redundancies › Making Staff Redundant
Rules for Making Employees Redundant

Employers must follow several important rules when they make employees redundant. Issuing notice periods and arranging proper redundancy consultation is part of the regulations.

GROUNDS FOR REDUNDANCY: An employer has many valid reasons for dismissing an employee.

But, the most genuine reason for making staff redundant is because you do no need anyone to do their job any longer.

Some typical reasons why this happens in business include:

  • The company changes its operations.
  • It operates in a different way (e.g. uses new technology).
  • A business relocation or it closes down.

There are two types of redundancies. They will either be compulsory or non-compulsory redundancy. Employers can contact their local Jobcentre Plus for help when making staff unemployed.

Note: A genuine redundancy occurs only if you can demonstrate that the job will no longer exist for the employee.

Employee Rights on Redundancy

UK employment legislation provides specific legal rights to employees made redundant. As a rule, they will qualify for an amount of redundancy settlement pay. All employees who are under notice of redundancy will have the right:

  • To a reasonable amount of time off work to search for a new job (or to arrange job training).
  • Not to be ‘unfairly’ selected for redundancy.

Note: All employers should take any steps available to avoid making staff redundant before discharging them.

Finding Suitable Alternative Employment

There are extra rules for employers after they make their employees jobless. They must also try hard to secure suitable alternative employment within their organisation.

In this case your employees can try out any alternative role for 4 weeks. This period can be longer if you both agree it in writing and they do not give up their right to receive redundancy pay.

Avoiding Compulsory Redundancies

All employers should take steps to avoid or reduce compulsory redundancies. Some typical actions which help to avoid forced staff redundancy include:

  • Seeking out any applicants who would take voluntary redundancy or an early retirement.
  • Finding out is any existing staff would like to try a flexible working system.
  • Consider laying off any self-employed contractors or freelance workers.
  • Avoid employing casual labour and restrict further staff recruitment.
  • A temporary reduction, or complete ban, of working overtime is common if you plan making employees redundant.
  • Introducing redundancy lay-off and short-time working procedures.
  • Using existing staff to fill any vacancies elsewhere in the business operation.
Offering Employees Alternative Work

You can still offer staff alternative work even if you select them for redundancy. But, a valid offer of alternative work must:

  • Be unconditional and ‘offered in writing‘ (staff should not have to apply).
  • Be made before your employee’s current contract expires.
  • Show how the new position differs from the old job.
  • Start within four (4) weeks of the previous job finishing.

Employees accepting this type of alternative work get a 4-week trial period. That allows everyone some time to determine if the work is suitable for them. They can still claim any redundancy pay due if you all agree that the work is not suitable.

Note: You can extend trial periods beyond four (4) weeks providing you both agree to this in writing.

There could be a situation where a staff member refuses to take the job, even though you think it is suitable. In this case your employee may lose their entitlement to any redundancy pay.

Making Employees Redundant: Grounds for Staff Redundancies in the United Kingdom