There are various steps your employer must take to carry out a fair redundancy process. If these procedures are not followed, you may be able to challenge your dismissal at an employment tribunal. Your rights will depend on your circumstances and length of service.

What is redundancy?

Redundancy occurs when an employer closes a business or workplace, or no longer needs as many employees to carry out work of a particular kind.

Redundancy situations fall into three categories:

• Business closure: The business closes altogether.
• Workplace closure: A workplace closes or moves to another location.
• Reduced need for employees: The employer needs fewer people to carry out a particular type of work.

The redundancy process

Your employer must select employees for redundancy fairly. They should identify which roles are affected and use fair, objective selection criteria. These may include skills, experience, qualifications, performance and disciplinary records. The criteria must be applied consistently and must not discriminate against employees.

Redundancy should not be used as an alternative to disciplinary or capability procedures where an employee’s performance is below the required standard.

Your employer must also:

• Give you information about the proposed redundancies.
• Consult with you meaningfully before making a final decision.
• Consider ways to avoid or reduce redundancies, including suitable alternative employment where available.
• Give you the correct notice if your employment is to end.

If 20 or more redundancies are proposed at one establishment within a 90 day period, collective consultation rules normally apply. Employers must consult recognised trade union representatives or elected employee representatives. From 6 April 2026, the maximum protective award for failing to comply with collective consultation requirements increased to 180 days’ pay for each affected employee.

Redundancy pay

Your employer must pay statutory redundancy pay if you qualify. You may also be entitled to enhanced redundancy pay under your contract or an employer’s redundancy scheme.

You must normally be an employee with at least two years’ continuous service to qualify for statutory redundancy pay.

Statutory redundancy pay is calculated using your age, length of service and weekly pay. For redundancies taking place on or after 6 April 2026, the rates are:

• Half a week’s pay for each full year of service when aged under 22.
• One week’s pay for each full year of service when aged 22 to 40.
• One and a half weeks’ pay for each full year of service when aged 41 or over.

The calculation is capped at 20 years’ service and weekly pay of £751. The maximum statutory redundancy payment is £22,530.

You may lose your entitlement if you unreasonably refuse suitable alternative employment. Special rules apply to alternative roles, including a trial period in certain circumstances.

Notice and notice pay

Your employer must give you the notice required by law or your contract, whichever provides the greater entitlement. If you are not required to work your notice, you may still be entitled to notice pay.

Notice pay is separate from redundancy pay, so you may be entitled to both.

What is unfair dismissal?

A redundancy dismissal may be unfair if your employer does not have a genuine redundancy reason or fails to follow a fair process. Your employer must not select you for redundancy for a discriminatory or otherwise unlawful reason.

Protected characteristics under the Equality Act 2010 include age, disability, gender reassignment, marriage or civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. It may also be unlawful to select someone because of trade union activity, part time status or fixed term status.

Employees generally need two years’ continuous service to bring an ordinary unfair dismissal claim. From 1 January 2027, this qualifying period is due to reduce to six months for most employees in England, Wales and Scotland. Some claims, including certain automatically unfair dismissal and discrimination claims, do not require a minimum period of service.

If you believe your employer has not followed a fair process or has selected you for an unlawful reason, you may be able to bring a claim at an employment tribunal. Strict time limits apply, so seek advice promptly.

Settlement agreements

Your employer may offer you a settlement agreement in return for an agreed payment or other benefits. This can waive specified employment claims if the legal requirements are met. You should obtain independent legal advice before signing.