What does redundancy or being made redundant mean?

It is a fact of life that it is sometimes necessary for a business to reorganise or restructure so as to increase efficiency and/or reduce costs.

Expert redundancy advice in Cheshire

An employee is made redundant if they are dismissed from their job as a result of the company needing to reduce the workforce.  Reasons for redundancy might include:

  • The company is closing down or moving.
  • An employer needs to cut costs and wants to reduce staff.
  • The role you were hired for no longer exists.

Possible Alternatives

An employer should consider whether there are any alternatives to dismissing a member of staff.   For example, reduced hours or a pay freeze may be a preferred option for both parties, although consultation with affected employees should always take place before any decision is made to change terms and conditions of employment.


If redundancy is unavoidable the correct procedure must be followed.  All affected employees should be given as much warning as possible and an explanation for the need for redundancies.  Once employees at risk of redundancy are indentified they should be invited to one or more meetings at which the selection criteria (which must be objective) and the scores are discussed.

It is important that employees’ representations regarding their scores are considered and any discussions as to how to avoid dismissal take place, including offering any suitable alternative employment.

Once all alternative avenues have been exhausted and the decision to make an employee redundant is made, the employee(s) must be notified that they are to be dismissed. The employee should always be given the right to appeal against the dismissal. Appropriate statutory redundancy payment and all contractual payments should be calculated and paid.  

Statutory redundancy pay

You will be entitled to a statutory redundancy payment if you have been employed for a minimum of two years.  Click here for the Government calculator to calculate your entitlement.  Or you can speak to one of our friendly solicitors on 01925 937070 or complete our Employment Law Enquiry Form by clicking here.

Settlement agreements in redundancy

Failure to follow the correct redundancy procedure can result in an employee claiming compensation for unfair dismissal in the employment tribunal. There may also be legal costs for both parties associated with bringing and defending such claims.  

Employees who are to be made redundant can enter into an agreement with their employer so that the employee will receive a lump sum termination or compensation payment in exchange for agreeing not to bring a claim against the employer in the employment tribunal or in the courts. Such agreements are commonly incorporated into a settlement agreement so as to ensure that such an agreement is legally binding on both parties.

Visit our settlement agreement page by clicking here for more information (also known as a compromise agreement).

The termination payment is usually tax-free up to £30,000.00.  You should receive, in addition to the compensation and statutory redundancy payments, all salary and other benefits (such as holiday pay) due under the contract up to and including the date of termination of employment.

ACAS (Advisory, Conciliation & Arbitration Service) has a very useful section, including booklets and videos, which you may wish to read.  ACAS, which is a government organisation, can also offer free advice and a mediation service. 

Have you recently been made redundant? Were you given adequate notice? Do you feel your redundancy was unfair?

If so, we could help you make a claim for an unfair redundancy against your former employers.  

Redundancy can be unfair in certain circumstances, such as when there is no genuine redundancy situation, a failure to consult, unfair selection or a failure to give employees the chance to look for suitable alternative employment. Your employer is obligated to ensure that you are treated fairly, but if they have neglected any of your rights you may be able to make a claim for compensation.

We appreciate how stressful and disruptive redundancy can be to your life, and the lives of those around you, particularly when an employer has neglected the rights you are entitled to.

Are you pregnant or have you raised a grievance? Other reasons for redundancy

You may believe that redundancy is not the true reason for your dismissal, you may be pregnant or have raised a grievance and believe that is why you have been selected for redundancy. 

If you feel you have been unfairly made redundant or unsure whether you have a claim against your employer, give DSM Legal Solicitors a call today to assess whether you have a claim against your employer. Your employer may request that you enter into a settlement agreement so that the terms agreed for the termination of employment are legally-binding.

Call DSM Legal Solicitors today on 01925 937070 to speak to a solicitor about the details of your case and the law concerning unfair redundancies. Alternatively you can complete the ‘Contact our Solicitors’ form at the bottom of this web page and we will get back in touch with you.

Contact us for legal advice and expert employment law advice

You can visit our Funding Your Employment Law Claim page for information on how to fund your redundancy claim or alternatively you can visit our Employment Law Section by clicking here to see what other employment law claims we deal with.

We now also have a Wigan office which can be contacted on 01942 914004.

Warrington Solicitors – Employment law claims

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All information contained within this website, including fact sheets or template letters, is provided for general information only and is not intended to constitute legal advice. You should contact a solicitor or other legal professional for advice relating to your specific circumstances if you have any questions about any legal matter. DSM Legal accepts no liability for any adverse consequences arising from reliance on this website for legal advice.

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