What Counts as a Genuine Redundancy?
Under s.139 Employment Rights Act 1996, a redundancy arises in three situations:
A redundancy is only genuine if the role disappears — not the person. If your employer has filled your position with a new hire shortly after dismissing you, the redundancy may be a sham.
Statutory Redundancy Pay — How It Is Calculated
You are entitled to statutory redundancy pay if you have at least 2 years' continuous service. The formula under s.162 ERA 1996:
- ½ week's pay for each year of service under age 22
- 1 week's pay for each year of service aged 22–40
- 1½ weeks' pay for each year of service aged 41+
Weekly pay is capped at £643 (April 2024), and the maximum number of years counted is 20. Maximum statutory payment: £19,290. Your employer may offer an enhanced package — a solicitor can advise on whether it is fair and whether tax applies.
Your Rights During a Redundancy Process
When Redundancy Becomes Unfair Dismissal
A redundancy dismissal is unfair if:
- The selection pool was manipulated to target a specific person
- The selection criteria were applied inconsistently or subjectively
- No genuine individual consultation took place
- You were not considered for suitable alternative employment
- You were selected because of pregnancy, whistleblowing, union membership, or another protected characteristic (automatically unfair)
- The redundancy was used as a pretext — your role was filled within months
- You were bumped into redundancy (your role was displaced by another employee) without fair process
Trial Periods for Alternative Roles
If your employer offers you a different role, you are entitled to a 4-week statutory trial period under s.138 ERA 1996. During this period you can decline the role without losing your right to statutory redundancy pay if the role is unsuitable. Your solicitor can advise on whether a role constitutes a "suitable alternative" before you commit or decline.
Typical Redundancy Timeline
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1
At-risk notification
Your employer notifies you that your role is at risk of redundancy. This triggers the consultation obligation — it is not the dismissal itself. No decision should be made at this stage.
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2
Consultation period (minimum 30–45 days for collective; no fixed minimum for individual)
You are entitled to discuss the business reason, your selection scores, and any alternatives. Bring evidence challenging any subjective scoring — now is the time.
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3
Dismissal letter & notice
If consultation concludes without resolution, you receive a dismissal letter with notice. Your statutory notice period applies (1 week per year of service, up to 12 weeks). The effective date of termination starts your 3-month tribunal clock.
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4
Redundancy pay & appeal
Statutory redundancy pay is due on or before your last day. You should receive an itemised calculation. You can appeal internally — and separately initiate ACAS Early Conciliation if the process was unfair.
Frequently Asked Questions
Is redundancy pay taxable?
Statutory redundancy pay and the first £30,000 of any enhanced redundancy payment are tax-free. Amounts above £30,000 are taxable as income. Payments in lieu of notice (PILON) are taxable in full since April 2018. A solicitor can help you structure any enhanced package efficiently.
My employer says I was dismissed for performance, not redundancy. Is that right?
If the real reason your role no longer exists is a reduction in work or business closure, it is legally a redundancy regardless of what your employer calls it. Misclassifying a redundancy as a performance dismissal is a common way to avoid paying redundancy. A solicitor can assess the true reason for your dismissal.
I was the only person in my pool of selection. Is that fair?
A pool of one is not necessarily unfair — if yours was the only role of its kind, the pool may legitimately be just you. However, employers sometimes artificially narrow the pool to target a particular individual. A solicitor can examine whether others doing similar work should have been included in the pool.
Can I be made redundant while on maternity leave?
Yes, but only in very limited circumstances where the redundancy is genuine and the entire role disappears. An employee on maternity, adoption, or shared parental leave has a priority right to any suitable alternative vacancy over other employees at risk. Failure to offer this priority right is automatically unfair dismissal — there is no 2-year qualifying period.
Do I have to accept voluntary redundancy?
No. Voluntary redundancy is just that — voluntary. You cannot be forced to take it, and refusing does not make your employment insecure. However, accepting it may mean you forfeit the right to bring some claims. Get advice before signing anything.