A redundancy situation exists where there is a reduction or disappearance in the requirement for a particular kind of work to be performed. This can either be at a particular workplace, or in the business generally. This could mean that a workplace is closing entirely, or just that the business intends to reduce headcount in a certain role as their business requirements for the work performed by that role have declined.
Frequently, redundancies are made as part of a cost-cutting exercise in response to a downturn in work. However, it is not necessary for a business to be losing money in order for a redundancy situation to exist. A redundancy situation can exist in a business which is making profit if there is a reduction in the need for a particular role.
Employers should also be aware that non-renewal of a fixed-term contract counts as a dismissal for employment law purposes and that it will normally be by reason of redundancy. Fixed-term employees with more than two years’ service may therefore be entitled to a statutory redundant payment if their fixed-term contract is not renewed, and employers should still consider how to follow a fair process in relation to the end of this contract (for example exploring with the employee whether there are any alternative vacancies which may be of interest to them).
Limited access modeSorry, you need to be an HR Protect client to access this content.
HR Protect clients receive all the employment law advice they need across the year, delivered by experienced specialist lawyers, at a single fixed price. In addition, being a client gives you access to our templates, flowcharts and guidance notes on this Hub, where you can also return to your favourites, share content with colleagues, and manage your account.
Already have an account?
Log in below to access this content.