Redundancy: the options

Potential problems following redundancy

An eligible employee (see rights of redundant employees) can claim unfair dismissal if they feel you:

  • have unfairly selected them for redundancy or incorrectly applied the selection criteria
  • failed to offer suitable alternative work where it was available
  • didn't follow the proper consultation process

Employees may also be able to claim a protective award if you fail to properly consult with their representatives, ie trade union or elected employee representatives in collective redundancy situations.

Unfair redundancy selection

An employee will have been automatically unfairly dismissed if you select them for redundancy for certain reasons eg involving discrimination or whistle blowing. If you select the employee for redundancy for any of these reasons, they will be able to make an unfair dismissal claim regardless of how long they have been in your employment.

Failure to properly consult

If you fail to properly carry out collective redundancy consultation, a complaint may be made to an Industrial Tribunal by:

  • a trade union or elected employee representatives
  • individual employees who have been dismissed as redundant where there is no recognised trade union and the employees have chosen not to elect employee representatives

The tribunal may award up to 90 days' pay to each affected employee.

See the redundancy consultation process.

The Department for the Economy (DfE) may also prosecute you for failure to notify the proposed redundancies in advance.

Financial problems

If your business would become insolvent as a result of making the statutory redundancy payments, DfE's Redundancy Payments Service (RPS) may be able to help, but you will be expected to repay the debt as quickly as possible. They can also help if you become formally insolvent and fail to pay the employer's contributions into an occupational or personal pension scheme or owe pay in arrears.

If you require further information or advice, you can call DfE's Redundancy Payments ServiceĀ on Tel 0800 585 811 or email

For more information contact the Labour Relations Agency (LRA) Helpline on Tel 03300 555 300.