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What is redundancy?

Redundancy is one of the ways in which an employer may lawfully terminate an employee’s employment. The employer must have a genuine need to reduce his or her workforce, which might be a result of business cost-cutting, moving premises or closing a department. In general, the employee’s job should no longer exist. It is not a case of redundancy if the employer immediately hires a direct replacement.

It is essential that the proper procedures for redundancy are set out and adhered to as if not, the employees who are dismissed may be able to claim that they have been unfairly dismissed and could be entitled to a much higher level of compensation.

In the situation where an employer wants to dismiss twenty or more employees from the same establishment in the space of ninety days, he or she must consult the representatives of the employees in question. If the employees are members of a trade union, this will be the representative of their trade union. Not consulting with the appropriate representative could make the employer liable to pay each redundant employee a protective award of up to ninety days’ pay.

What is Unfair Dismissal?

If you have been dismissed after having worked continuously for an employer for over a year (or two years if the employment began on or after 6th April 2012), then you could potentially bring a claim in the employment tribunal for unfair dismissal.

In some circumstances however, a dismissal is automatically unfair, if, for example, it is the result of discrimination relating to health and safety, race, sex, disability, religion or belief, sexual orientation, pregnancy, trade-union membership, whistle-blowing, TUPE or age.

In other circumstances, an unfair dismissal claim may result from an employee being wrongly disciplined for misconduct, capability or performance issues. A finding of or acceptance by an employer that there has been an unfair dismissal can mean that rather than just compensating the employee for loss of earnings, the employer might also have to pay a bonus as the employee may then be classified as a “good leaver” under the terms of an executive remuneration agreement.

In a great many cases, employers offer a departing employee a compensation payment rather than face the prospect of going to the Employment Tribunal and this will be recorded under the terms of a Settlement Agreement.

Constructive unfair dismissal

Constructive Unfair Dismissal occurs when an employee is forced to leave their job against their will because their employer breached the terms of their contract. Examples include not being paid or being demoted for no apparent reason. A potential difficulty with constructive unfair dismissal situations is that the employee must leave their job immediately in order to make a claim since by staying, the employer could argue that the employee was implicitly agreeing to the conduct or treatment which he or she maintained was a breach of the contract. If you are considering a claim for constructive unfair dismissal, we strongly recommend that you seek legal advice before resigning.

How we can help

We can advise you on your employment rights and assess whether or not the procedure for dismissal is being or has been properly followed. We can also provide guidance as to the compensation that you might be entitled to. In addition, we also provide advice on settlement agreements which employers use in order to set down the terms of the termination of employment.


If you believe yourself to have been unfairly dismissed or have any queries regarding settlement agreements; please contact us for a free, initial discussion to discuss your situation.