Toggle high contrast
Issue date
About this resource

This TUC guide to redundancy is written against the backdrop of the coronavirus (Covid-19) public health emergency, but the information and guidance in it is designed to support union reps for the long haul. This guide is to help unionrep support members at every stage of the redundancy process, including helping them access the knowledge, training and skills they need to move forward afterwards.

The law requires employers to consult properly and act fairly and without discrimination whenever they make staff redundant. This is the case no matter how urgent or dire the economic challenges they are facing. Bad employers that break the law can be made to face legal penalties.

Please note since publication of this guide the job retention scheme referred to in the guide, designed to protect jobs through the Covid-19 pandemic, has been extended - most recently until the end of April 2021. The guide is not legal advice. While we have tried to be as accurate as possible, we cannot take responsibility for any loss arising from use of the information included. Reps should always seek prompt legal advice from their trade unions when required, as employment tribunal deadlines are very short. The information in this guide is also subject to changes in government support schemes. Reps can refer to for the latest detail on these.

What is redundancy?

Redundancy dismissals happen when an employee loses their job through no fault of their own.

The word ‘redundancy’ has two different legal meanings. The first is used for individual redundancy rights: to a fair dismissal; to access suitable alternative job opportunities; to time off to look for work, and to a redundancy payment when redundancy cannot be avoided. The second meaning, used in the specific context of collective redundancy consultation. When it comes to collective consultation, a redundancy dismissal is any “dismissal for a reason not related to the individual concerned”. This is wider than the definition used to claim unfair redundancy dismissal and redundancy payment, the key difference is that collective consultation obligations can be triggered even if there is no reduction in the number of employees.

Individual redundancies

A worker can be made redundant if the reason for their dismissal is that the employer needs fewer employees to do a particular kind of work, or to work in a particular location. This technical definition of redundancy is found in section 139 of the Employment Rights Act 1996 (ERA). Tribunal judges call this a ‘genuine redundancy situation’ and, for those who qualify, it will trigger the right to a redundancy payment.

Here are some examples of genuine redundancy situations:

  • economic pressures have forced an employer to close some retail outlets and jobs are lost
  • an employer relocates to a new site
  • an employer introduces more efficient technology, removing the need for some jobs and creating new ones
  • a large order is lost, leading to a fall in work
  • one business buys another, leading to duplication of roles in the new business. There can be a redundancy dismissal even if your job still exists but has been given to another employee whose own job was eliminated as long as, overall, the employer needs fewer employees.

There can be a redundancy dismissal even if your job still exists but has been given to another employee whose own job was eliminated as long as, overall, the employer needs fewer employees.

What if the employer wants major changes to job roles?

Sometimes a very significant change to job roles – where the new job is something completely different from the old one – can be a redundancy situation.

However, members in this position should check with their union as the legal position is rarely straightforward. For example, the employer may disagree as to the extent of the job changes. Or they may argue that the members’ employment contracts allow the employer to insist on making the changes they want, so that the members are not being dismissed for redundancy at all but, instead, for refusing to obey the employer’s ‘reasonable’ order. Even if the two jobs are very different, the new job may be ‘suitable alternative employment’ meaning, again, no redundancy pay.

When representing members in this situation, it is important to remember that job role changes must not breach members’ rights not to suffer discrimination under the Equality Act 2010. And reasonable adjustments must be made for any member with a disability.

Job role changes should never be made without proper consultation. Any employer that behaves in this way risks destroying trust.

Who has redundancy rights?

Only ‘employees’ have redundancy rights. This includes employees on a fixed-term or parttime employment contract and apprentices. Neither ‘workers’ nor the genuinely selfemployed have redundancy rights.

Temporary agency workers don’t have redundancy rights – unless they are direct employees of the employment agency or business they work for.

Employees who are dismissed for redundancy after working for two full years are entitled to a statutory redundancy payment.

Learn more on redunancies in the full guides, here.

The employer's duty to provide information

The employer must provide reps with the following statutory information in writing:

  • reason(s) for the redundancies
  • number and descriptions of employees proposed to be made redundant
  • total number of employees of any description
  • proposed selection procedure
  • proposed method for carrying out redundancy dismissals, including timescale
  • proposals for calculating redundancy pay if it is to exceed the statutory minimum
  • the number of temporary agency workers working for the employer
  • where those agency workers are working
  • what types of work they are carrying out. Consultation must not be delayed because the employer does not have all the statutory information. Any outstanding information must be passed to reps as soon as it is available.

Consultation must not be delayed because the employer does not have all the statutory information. Any outstanding information must be passed to reps as soon as it is available.


Collective redundancy consultation

What the Law says

All employers must consult collectively if they propose to carry out 20 or more redundancy dismissals at one establishment over a 90- day period. Where a union is recognised, collective consultation must be with the union.

An employer that fails to consult can be taken to an employment tribunal and forced to pay a financial penalty, called a ‘protective award’.These collective consultation rights are found in Chapter II (section 188 onwards) of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). They are based on European Union law — the Collective Redundancies Directive.

The whole point of collective consultation is for unions and employers to work together from the start of the consultation period

Checklist: negotiating a fair redundancy selection process during covid-19

Here are some specific issues of concern for reps:

  •  Will redundancy consultation meetings take place remotely or face to face?
  •  What material will employees get in advance of their meeting so they can prepare? How long in advance? What form will it take?

If meetings are to take place remotely:

  • Do all affected employees have access to suitable IT equipment (and broadband), which they are able to use?
  • What steps will be taken to ensure the process is secure and confidential?
  • What about members whose first language is not English?
  • What arrangements will be made for employees to be fairly represented by their chosen rep and to confer in private?
  • What will a virtual appeal look like?
  • What adjustments will be made for disabled employees?

If meetings take place in person, what arrangements will be made to ensure safe travel and social distancing and for members to be fairly represented by their chosen rep?


What a fair procedure looks like

All employers must follow a fair redundancy procedure before deciding to dismiss for redundancy.

If fewer than 20 redundancy dismissals are proposed within a 90-day period, the formal TULRCA section 188 collective consultation procedure will not be triggered. Nevertheless, employers should still consult the workforce over their proposed selection pool, method, and criteria.

Employers that impose redundancy selection processes without consultation risk carrying out unfair redundancy dismissals. They also risk losing the trust of their workforce, including employees who kept their jobs this time around, by failing to treat them with dignity and respect.

Learn more in our full Handling Redundancy guide

Office employees standing in a huddle at a doorway
Reza Estakhrian / Getty Images

Statutory redundancy pay

An employee dismissed for redundancy must be paid a statutory redundancy payment if:

  • they have worked for their employer for at least two years, and
  • they have not unreasonably refused an offer of suitable alternative employment.

Statutory redundancy pay is based on weekly wages at the date of the redundancy dismissal notice. This is important for members who cut their hours from full- to part-time, for example on returning from maternity leave. No matter how many years they spent working full-time, all their statutory redundancy pay will be based on their part-time wage.

Statutory redundancy pay is

  • half a week’s pay for each full year of employment while aged below 22
  • a week’s pay for each year while aged 22–40
  • a week and a half’s pay for each year while aged 41 or over.

The government website has an online ready reckoner.

Where there is no contractual right to enhanced redundancy pay, an employer may decide to offer enhanced redundancy pay on a discretionary basis.

Redundancy pay after furlough

All employees who are made redundant after being furloughed by their employer under the government’s coronavirus Job Retention Scheme (JRS) must have their statutory redundancy pay calculated using their normal ‘pre-furlough’ wages (100 per cent pay). From 31 July 2020, it is against the law (the Employment Rights Act 1996 (Coronavirus – calculation of a week’s pay) Regulations 2020) for employers to pay statutory redundancy pay at the reduced furlough rate.

Employers are not allowed to use the JRS to fund redundancy payments.

Notice or notice pay

As well as a redundancy payment (if eligible), an employee dismissed for redundancy must be given their notice. An employer that does not want employees to work their notice must pay them notice pay (often called ‘pay in lieu of notice’.)

Notice must be at least:

  • one week, after working continuously for between one month and two years, or
  • one week for each year of continuous employment between two and 12 years, up to a maximum of 12 weeks’ notice after 12 years of work. Some members may have more generous contractual notice rights

Notice pay after furlough

Some employers have been using the government’s coronavirus Job Retention Scheme (JRS) to pay the wages of furloughed employees who are working out their notice after having been made redundant. While this practice goes against the spirit of the JRS – which is to keep people in work – it is not against the law.

The JRS cannot be used to cover lump sum payments in lieu of notice.

Statutory notice pay for furloughed employees must be based on their normal pre-furlough wages. Ask for help from an official at your union if your employer is paying statutory notice pay at the lower furlough wage. This is against the law.

Redundancy and insolvency

When an administrator is appointed 

The appointment of insolvency administrators is an extremely worrying development for staff, especially at a time of economic crisis. But there is an important difference between administration and liquidation (‘winding up’). At its heart, administration is a company rescue procedure designed to help restructure a still-viable company and save at least some jobs (even if this ends up proving impossible). By contrast, liquidation is for terminal cases, where there is no hope of saving the business, with the unavoidable loss of jobs.

Administrators appointed during the coronavirus pandemic have been able to use the JRS to retain employees on furlough, instead of making them redundant immediately.

There are some key collective and individual rights to be aware of in an insolvency.

Read more

Payment from the redundancy payments office

When an employer is insolvent, statutory redundancy pay and certain other payments can be claimed from the Insolvency Service. The claim is made online to the RPO. There is an email address for help:

The claim can be made as soon as the member is made redundant, but they will need a ‘CN’ (case reference) number from the insolvency practitioner in charge of the employer’s insolvency. No claim can be made without the CN number. The claim to the RPO must be made within six months of the dismissal date, otherwise it will be rejected.

There is an online portal called furlough and redundancy for employees made redundant by an insolvent employer after being on furlough under the JRS.

There are two forms: RP1 for the statutory redundancy payment, wages, and holiday pay; and RP2 for statutory notice pay. The Insolvency Service provides a useful guide to completing the form ‘What to do when you’ve been made redundant’.

Here is what can be claimed from the RPO:

  • statutory notice pay
  • statutory redundancy pay
  • wage arrears, including wages, overtime, bonuses, commission and any protective award (up to eight weeks’ pay in total)
  • holiday pay (up to six weeks’ pay).

The eight weeks of pay need not be consecutive: employees can choose the highest-paid weeks of arrears.

Administrators appointed during the coronavirus pandemic have been able to use the JRS to retain employees on furlough, instead of making them redundant immediately.

Apprentices and Redundancy

In normal times, apprentice redundancies are rare unless a business is closing down.

Apprentices are employees. They have rights to protection from unfair dismissal for redundancy. They also have rights not to be selected for redundancy for a reason that is discriminatory, or unlawful in some other way, for example because they complained about poor health and safety at work. In some situations, they may also be able to claim damages for contract breach, if their apprenticeship contract is ended early for no good reason.

As with all employment claims, tribunal deadlines are very short (just three months, less one day, from dismissal), so it is important not to delay seeking help.

Apprentices and covid-19

The Covid-19 pandemic is having a significant impact on apprentices, their employers and learning providers, with disrupted learning, financial strain and redundancy.

The Department for Education (DfE) has made temporary changes to the normal rules on breaks in learning and end-point assessments. It has stated its ambition to find redundant apprentices another employer within 12 weeks. Their training provider must also help. Reps can check that apprentices know about this commitment – and can help make sure it is actually happening on the ground. Apprentices can also contact the Redundancy Support Service for Apprentices on 0800 015 0400 for advice.

Reps should also ensure that apprentices made redundant part-way through their apprenticeship get a proper record of part-completion, as evidence of what they have learned.

Under current apprenticeship funding rules, apprentices made redundant with less than six months of their apprenticeship agreement left to run can complete the apprenticeship without finding a sponsoring employer, but they should be supported to find a new employer where possible. In September 2020 the government began the process of changing the law to allow funding to continue for apprentices to complete their training if they are at least 75 per cent of their way through their programme at the point of redundancy.

From 1 August 2020 to 31 January 2021, employers are to get a one-off payment of £2,000 for each new apprentice aged under 25, and £1,500 for each aged 25 and over.

The TUC’s unionlearn has resources and advice for apprentices and reps, and will keep this updated as the law and information changes.


Moving Forward

Learning and training

Employer support for learning and training is a key part of the collective consultation process. TULRCA section 188 says employers must consult collectively on ways of “mitigating the effects” of redundancies. With Covid-19, this is especially important in sectors such as retail that are likely to suffer long-term scarring, or where the collapse of a single employer devastates an entire local economy.

The fact that employees are furloughed or working from home does not diminish in any way the employer’s legal responsibility to consult over reskilling employees selected for redundancy.

Why reskilling matters

Reskilling is vital for members because it boosts their chances of getting another job by improving their skills, qualifications and employability, provides a chance to change career and builds confidence in their ability to find new work.

 It is also good for employers because it improves the morale of staff left behind to see their coworkers treated fairly. Boosting retention and attendance also cuts the cost of agency staff.

It is also important for your union, because members value the work the union does to help them retrain to move forward. They are more likely to stay union members, or to rejoin in their new role.

It is also vital for the UK’s economic recovery from the effects of the Covid-19 pandemic, which is why the TUC is campaigning for a nationwide new jobs guarantee and other measures on skills.

Read the full Handling redundancies guide for union reps.

Enable Two-Factor Authentication

To access the admin area, you will need to setup two-factor authentication (TFA).

Setup now