Redundancy

Last updated: 15 Sep 2026

Prospect is here to support members through any redundancy situations they face.

We have answered some of the key questions around redundancy below, while members can also log in to our members’ area to find extra detail in our guide to redundancy.

What is redundancy?

A redundancy situation is where the employer requires fewer employees or there is a closing workplace.

This could be where:

  • there is a complete closure of a business or organisation
  • there is a closure of a particular workplace or site
  • the employer’s need for employees doing particular work has ceased entirely, or
  • the employer decides to reduce the number of employees doing a particular job.

In addressing whether there is a redundancy situation, the tribunal has to consider the employer’s requirements for someone to do the job the employee was employed to do.

The fact that the work may still exist is not necessarily the issue, but rather whether the employer decides to have it done.

Where the work continues to be done but is shared out between other employees there can still be a redundancy situation, because there will be a need for fewer employees.

Fixed-term contracts

When a fixed-term contract comes to an end it will be a redundancy if the reason for the non-renewal of the contract is that there is no longer any need for an employee to do that work.

For example, the end of a one-off project would be a redundancy situation, but if a maternity leave locum post comes to an end it would not be a redundancy situation because there is no reduction in the requirement for an employee.

Members can get more detail by logging in and downloading our guide to redundancy.

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Am I entitled to a redundancy payment?

Employees who are made redundant and have two or more years of continuous employment will be entitled to a statutory redundancy payment.

Statutory redundancy pay

To be entitled to a statutory redundancy payment the employee must:

  • have been employed for at least two years
  • be dismissed in a redundancy situation and
  • not have unreasonably refused suitable alternative employment.

Suitable alternative employment

The employee loses the right to a redundancy payment if they unreasonably refuse suitable alternative employment.

It is often difficult to judge what amounts to suitable alternative employment and it will be for a tribunal to determine on the facts of each case what is suitable.

Where the work is very similar, or uses the same skills and experience, with the same terms and conditions, it is likely to be suitable. But if there is a significant change in duties or terms and conditions it may not be found to be suitable.

The employee’s personal circumstances will also be relevant in determining if they have been unreasonable in refusing such an offer. For example, a small change in hours of work may be more difficult for someone with caring responsibilities than for others without such responsibilities.

Where the work is different the worker will usually be entitled to a statutory four-week trial period.

Amount of payment

Statutory redundancy payments are calculated depending on the age and length of service of the employee as follows:

  • Half a week’s pay for each full year you were under 22.
  • One week’s pay for each full year you were 22 or older, but under 41.
  • One and half week’s pay for each full year you were 41 or older.

Length of service is capped at 20 years and a week’s pay is capped at £538. The maximum redundancy pay is £16,140. These figures are current from 6 April 2020 and are increased each year. (In Northern Ireland the current figures are £560 per week with a maximum of £16,800).

Contractual redundancy

Many employers will provide enhanced redundancy payments, perhaps by increasing the accrual or not applying the statutory caps. So always check your employer’s policies.

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Does my employer have to consult the union about redundancy?

An employer must consult where they propose to make 20 or more employees redundant at one establishment over a 90-day period.

Where there is a recognised trade union the employer must consult with the union.

If there is no union recognised then the employer must consult with other employee representatives.

Consultation must be undertaken ‘with a view to reaching agreement’ and ‘in good time’.

Where there are 100 or more redundancies proposed the consultation must begin at least 45 days before the first dismissal takes effect. Where there are between 20 and 99 redundancies it must be at least 30 days before.

The consultation must include discussion on ways of:

  • avoiding the redundancies
  • reducing the numbers being dismissed
  • mitigating the consequences of the dismissals.

If an employer fails to consult, the union can bring a claim to the employment tribunal. The tribunal can award up to 90 days’ pay for each employee who has been dismissed or was proposed to be dismissed (known as a protective award).

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I have a clause in my contract saying I can be laid off or put on short-time working, what does this mean?

A temporary lay-off is where the employer says there is no work for an individual to do and they are told not to work and will not be paid, but their employment contract continues. Short time working is when the employer has less work for the individual to do and reduces their hours and pay.

If an individual’s contract of employment has an express clause regarding lay off or short-time working (LOSTW), the employer may invoke these clauses and they will not be in breach of contract if they cut pay or hours. These clauses have been fairly rare outside of manufacturing and construction, but are being considered now by a range of other employers.

If an individual is laid off, the law provides that employees are entitled to a guarantee payment of £30 per day up to a maximum of 5 days of guarantee payments.

Can I claim a redundancy payment?

The right to claim a redundancy payment only applies if you are laid off or on short-time working for either:

  • 4 weeks in a row, or
  • 6 weeks in a rolling 13-week period.

To claim redundancy the employee must give the employer a ‘notice of intention to claim’ (NIC).

This NIC must be:

  • given within 4 weeks of the last day of the 4 or 6 week of lay-off or short time,
  • in writing, and
  • state the intention to claim a redundancy by reason of lay-off or short time.

If the employer intends to resist the claim for redundancy they must serve a counter notice to the employee stating that they contest the claim. This must be issued in writing within 7 days of the NIC.

The employer can only resist the claim for redundancy on the ground that there is a reasonable expectation of:

  • work for the employee commencing within 4 weeks of the NIC, and
  • the work is expected to continue for at least 13 weeks.

If, in fact, the employee is kept on lay off or short time during the four week period following the NIC the employer’s defence will automatically fail.

The employee can bring a claim to the Employment Tribunal for a redundancy payment if the employer rejects their application.

Finally to be entitled to the redundancy payment the employee must resign. This must be done by the giving the correct notice of termination. The notice period must be either one week, or any longer period that applies in the contract.

The notice must be given within:

  • 4 weeks of the NIC if the employer does not serve counter notice
  • 3 weeks of the service of notice of withdrawal of any employer’s counter-notice, or
  • 3 weeks of an employment tribunal judgment that the employee’s claim succeeds.

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My employer is saying there is no work for me, what are my rights to redundancy?

If your employer has no work for you this will usually be a redundancy situation and all employees with two years or more service will be entitled to redundancy pay. But if there is a clause in your contract permitting the employer to lay off or introduce short time working this may affect your claim. See I have a lay-off clause in my contract, can I claim a redundancy payment?

How much redundancy pay are you entitled to?

Statutory redundancy pay depends on your age and length of service. You will be entitled to your gross weekly pay, up to a maximum of £538 per week, for each year of service up to a maximum of 20 years, with 1.5 weeks per year over the age of 40.

For example if you have worked for five years, earn more than £538 per week and are 35 years old you would receive £2,690. If your employer usually pays enhanced contractual payments this should apply instead.

For employees who were made redundant after being furloughed during the Covid pandemic your redundancy pay must be calculated on your pre-furlough pay and not any reduced rate that was agreed during furlough.

In order to make redundancies an employer must:

  • have a fair selection process as to who is to be made redundant
  • consult with you (and in some cases the union), and consider offering any alternative work that is available.

If the employer acts unfairly, or in a discriminatory way, in making redundancies there could be an unfair dismissal claim.

If it is likely to be a temporary period of no work, you might want to accept a short period of leave or reduced hours, rather than taking redundancy pay, in order to maintain your employment. Contact the union to discuss this further.

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Can I claim a redundancy is an unfair dismissal or unlawful discrimination?

Dismissal in a redundancy case may also be an unfair dismissal.

There are four potential issues which might make a redundancy dismissal unfair. These are if:

  • there was not a genuine redundancy situation
  • the employee was unfairly selected for redundancy
  • there was inadequate consultation with the employee, or
  • the employer fails to seek alternative work for the employee.

For example, if an employer has used an unfair selection process, and the employee has at least two years continuous employment, they may be able to bring a claim for unfair dismissal and recover additional compensation through the employment tribunal.

Automatic unfair dismissal

If an employee is selected for redundancy for a ‘prohibited reason’ the dismissal will be automatically unfair. These include:

  • pregnancy, maternity or the taking of parental or family leave
  • health and safety activities
  • trade union membership or activities
  • making a protected disclosure in the public interest (whistleblowing)
  • being a statutory employee representative or pension scheme trustee
  • attempting to assert a statutory right.

Selection for redundancy on all these grounds will make the dismissal automatically unfair. In these special cases the employee does not have to complete two years’ continuous employment as they would with ordinary unfair dismissal cases.

Discrimination under the Equality Act

If a redundancy dismissal is directly, or indirectly, because of a protected characteristic it will be unlawful discrimination under the Equality Act.

The protected characteristics are; age, disability, gender, gender reassignment, pregnancy or maternity, marriage or civil partnership, race, religion or belief, or sexual orientation.

There is no qualifying length of service for claims under the Equality Act.

Similar provisions apply under the equality legislation in Northern Ireland.

Redundancy during maternity leave

Where an employee is at risk of redundancy during maternity, shared parental or adoption leave, they must be offered any suitable available vacancy. In this case the new job must be both suitable in relation to the employee and appropriate for them to do. The terms and conditions of the new job must not be substantially less favourable than the old job.

This effectively gives the person on maternity leave precedence over other workers at risk of redundancy.

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What rights do I have if my employer becomes insolvent?

If the employer becomes insolvent, the Government’s National Insurance Fund will pay some debts owed to the employee on redundancy.

These include:

  • the statutory redundancy payment
  • up to eight weeks’ arrears of pay (including any protective award)
  • pay in lieu of statutory notice, and
  • holiday pay.

A week’s pay in each case is limited to £538 (or £560 in Northern Ireland). These figures are current at 6 April 2020 and reviewed annually.

Unfortunately enhanced redundancy pay or further arrears of pay are not covered by the National Insurance Fund, so the employee becomes a creditor of the insolvent company and you may not be able to recover the additional sums.

These situations can be complicated so always seek advice from the union.

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How do I make a claim to a tribunal?

Claims may be brought to employment tribunals to enforce payment of a redundancy payment or for unfair dismissal or discrimination claims.

If you have not been paid a statutory redundancy payment you can make a claim to the employment tribunal. The claim must be started within six months of the date of the end of employment.

Claims for non-payment of a contractual redundancy payment of up to £25,000 can be pursued in the employment tribunal as a breach of contract claim arising on termination of employment. A claim must be presented within three months of the termination date.

Unfair dismissal or discrimination claims can be pursued through the employment tribunal. These claims must be started within three months of the effective date of dismissal.

For tribunal claims for redundancy, breach of contract, unfair dismissal, or discrimination the first stage is to present an application for early conciliation through ACAS (the LRA in NI). This must be done within the relevant time limit.

Claims for redundancy pay above £25,000 would need to be brought in the civil courts. The time limit for these claims is six years from the breach in England, Wales, and Northern Ireland and five years in Scotland.

Advice should always be sought in good time from a Prospect full-time officer wherever there is a likelihood of a legal claim.

Members should note that legal advice and workplace assistance is offered at Prospect’s discretion, and will be decided depending on the facts and merits of each case.

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How can Prospect support you when dealing with redundancy or dismissal?

Redundancy and dismissal are often the toughest situations that anyone has to go through in their career, and some of the toughest situations in their life.

Our officers have significant experience in assisting members to challenge unfair dismissals and deal with redundancy issues.

Many problems are resolved at an early stage by Bectu representatives, who take up cases and represent members in local hearings. Our full-time officers are available to represent members in more serious cases and to advise in stages up to dismissal and appeal.

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This page provides general information. It does not cover all circumstances and should not be treated as a definitive answer. Members should contact Prospect either through the Member Contact Centre or contact their union rep or full-time officer for specific advice.

Get support as a member

Speak with your representatives: 
If you work in an organisation that has local Prospect representatives, you should speak to them about any work-related issues.

Call the member contact centre on 0300 600 1878 or email [email protected]