Redundancy advice

What is redundancy?

An employee is dismissed for redundancy, and may qualify for redundancy pay, if the following conditions are satisfied:

• the employer has ceased, or intends to cease continuing the business, or
• the requirements for employees to perform work of a specific type or to conduct it at the location in which they are employed has ceased or diminished.

For collective consultation purposes only there is a different definition of "redundancy".

A redundancy therefore applies where the workforce is reorganised and there is:

• less work, and/or;
• changes in conditions that result in the new job being quite different from the old one, and/or;
• work put out to contract by the employer – in which case there may be a TUPE transfer.

The test for redundancy is whether the employer requires fewer (or no) workers to do work of a specific kind at a particular location and not just whether the work itself has ceased or diminished.

Section 139 (Employment Relations Act, 1996) which defines rights to redundancy pay, makes direct reference to an employee’s "place of employment" as the test for whether or not the dismissal is for redundancy.

Though many employment contracts contain mobility clauses this does not necessarily mean an employee cannot be made redundant when their own work ceases. Consequently, when employees work at one location, they may be entitled to claim redundancy pay when that work ceases, even if their contract stipulates that they can be required to work at alternative locations.

A dismissal for redundancy purposes is defined in section 136 (Employment Relations Act, 1996) in a basically comparable way to that for unfair dismissal but it is irrelevant whether the workers have volunteered or been selected. An employment tribunal will view either as dismissal for redundancy purposes.

The information in this section provides guidance and some basic details of employment rights. They do not attempt to be comprehensive, and should not be taken as an authoritative statement of the law. For latest advice and guidance, please contact our Helpdesk.