The following Restructuring & Insolvency guidance note provides comprehensive and up to date legal information covering:
For the purposes of entitlement to a redundancy payment, an employee is dismissed by reason of redundancy if the reason for dismissal is:
the employer ceases carrying on the business in which the employee worked
the employer ceases carrying on the business in the place in which the employee worked, or
the business needed fewer people carrying out work of the kind which the employee performed
A much wider definition of redundancy applies (solely) in the context of consultation: there, 'dismiss as redundant' means a dismissal for any reason or reasons not related to the individual concerned.
In general, employees dismissed by reason of redundancy have rights to:
a redundancy payment
fair selection for redundancy
proper consultation before dismissal
take reasonable time off to look for alternative employment
For more information, see Definition of redundancy and Redundancy—collective consultation checklist for employers within the Lexis®PSL Employment module (with subscription).
Redundancy payments are made to compensate employees for losing their jobs. A redundancy payment is payable when an employee with two years' or more continuous employment is dismissed because of redundancy. This can include where:
fixed-term contracts come to an end without renewal
circumstances operate to terminate the contract
an employee volunteers to take redundancy
the work which one employee performs has not diminished, but he is dismissed to allow his position
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