Employment Tax

Individual redundancy

Produced by Tolley in association with Emilie Bennetts at Charles Russell Speechlys LLP
  • 21 Dec 2021 16:43

The following Employment Tax guidance note Produced by Tolley in association with Emilie Bennetts at Charles Russell Speechlys LLP provides comprehensive and up to date tax information covering:

  • Individual redundancy
  • The redundancy process
  • Identify a selection pool of employees at risk of redundancy
  • Identify fair selection criteria
  • Warn and consult
  • Apply the criteria fairly
  • Consult on the selection
  • Alternatives to dismissal
  • Bumping
  • Consider alternative employment
  • More...

Individual redundancy

An individual redundancy is a dismissal that can be attributed wholly or mainly to a situation in which:

  1. the employer has ceased to carry on the business for the purpose of which the employee was employed (ie a business closure)

  2. the employer has ceased to carry on the business in the place where the employee was employed (ie a workplace closure)

  3. the requirement of that business for employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where the employee was employed have ceased or diminished (ie reduced requirement for work)

‘Ceased’ as well as ‘ceased or diminished’ also includes scenarios in which the employer intends or expects for the business or work carried out to cease or diminish. This permits employers to plan for changes to their business operations and work force in an organised fashion.

If there is an issue about the place where the employee works, this means the place where he works as a matter of fact, not the places where he could have been asked to work under his contract of employment.

If the employer proposes to make 20 or more employees redundant within a 90 day period, the rules on collective redundancy are also likely to apply, regardless of whether or not such employees are spread across different offices or sites. For further information on collective redundancy, see the Collective redundancy ― overview and Information and consultation in collective redundancy guidance

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