Redundancy & redundancy pay
- What does redundancy mean?
A job becomes redundant when there is a reduced need for the particular work the job exists to do, or when that need disappears altogether, or where there is no longer a requirment to carry out work in a particular location. For example:
- in a distribution warehouse we employ 20 people to meet the workload. Because of a loss of a major customer, the orderbook is halved. In the absence of other work coming in, 10 jobs may be at risk and the job holders may (after a fair process) be dismissed as redundant (due to reduced work)
- in a manufacturing company the decision is taken to make goods in China instead of the UK. The UK workforce may be dismissed for reasons of redundancy (the work will no longer be done at that location).
Redundancy for any other reason than reduced work or a change in location risks becoming an unfair dismissal. A redundancy arising because of a reorganisation of the workforce is potentially fair, providing a proper and fair process is followed.
- How do I calculate redundancy pay?
- How do I make an employee redundant?
- Is redundancy pay taxable?
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