7. Redundancy

An employee is dismissed by reason of redundancy if the definition contained in section 139 of the Employment Rights Act 1996 (ERA 96) is met, which is that the dismissal is wholly or mainly because:

• the employer has ceased, or intends to cease, to carry on the business for which the employee was employed, or to carry on that business in the place where the employee was employed; or

• the requirements of the business for employees to carry out work of a particular kind, or to carry it out in the place where they are employed, have ceased or diminished, or are expected to cease or diminish.

But for a redundancy dismissal to be fair, the employer must still act “reasonably” in the circumstances, which will include carrying out a fair selection process, where applicable, consulting the employee(s), and offering alternative employment if this is available.

An employee who unreasonably refuses an offer of suitable alternative employment loses their right to a statutory redundancy payment.