Updating authors: Julian Hoskins and Sarah Lamont

On this page:
Summary
Future developments
Practical example
Action point checklist
Key references
Questions and answers
Definitions
The right to payment
Calculation
Exclusions from redundancy payments
Redundancy and insolvency
Lay-off and short-time working
Collective consultation
Individual selection and consultation
Remedies
Enhanced redundancy payments

Summary

9.401

• Although redundancy might be thought to cover any situation where an employee, through circumstances over which he or she has no control, finds him- or herself without a job, the law gives a more limited definition of what constitutes a redundancy. (See 9.403 Definitions)
• The law concerning redundancy and the right to receive a redundancy payment was introduced by the Redundancy Payments Act 1965, which was subsequently amended by the Employment Protection Act 1975, re-enacted in the Employment Protection (Consolidation) Act 1978. The current law is contained within part XI of the Employment Rights Act 1996. 
• For an individual to be eligible for a redundancy payment certain criteria must be satisfied. (See 9.404 The right to payment)
• Statutory redundancy payments are calculated by reference to a statutory formula. (See 9.405 Calculation)
• Employees who are laid off or on short time may also be entitled to claim a redundancy payment. (See 9.408 Lay-off and short-time working)
• Depending on how many employees are to be made redundant, an employer may be under a statutory duty to consult collectively with representatives. (See 9.409 Collective consultation)
• Even if an employer is under no duty to consult collectively, an employee dismissed by reason of redundancy might claim that the dismissal is unfair if appropriate selection and consultation procedures have not been followed. (See 9.410 Individual selection and consultation)
• An employee may lose his or her right to a redundancy payment in certain circumstances. (See 9.406 Exclusions from redundancy payments)
• Making enhanced redundancy payments will not be unlawful under the age discrimination legislation provided that the scheme mirrors the statutory redundancy scheme. (See 9.412 Enhanced redundancy payments)

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Future developments