Made Redundant? Your Rights and What to Do Next

Being made redundant is one of the most disruptive events in working life. It can come out of nowhere, and the shock can make it hard to think clearly about your rights. But UK law provides significant protection for redundant employees — and acting quickly to understand those rights can make a substantial financial difference. Here is what you need to know.

What Is Redundancy?

Redundancy is a specific legal concept under Section 139 of the Employment Rights Act 1996. It occurs in three situations: the employer closes the business entirely, the employer closes a particular workplace, or the employer needs fewer employees to do work of a particular kind. It is not redundancy if your employer simply dislikes your performance, wants to change your role, or wants to cut costs by dismissing you and immediately hiring someone cheaper to do the same job. Using the label "redundancy" when the real reason is something else is still dismissal and may be unfair.

Statutory Redundancy Pay

If you have been continuously employed for at least two years, you are entitled to a statutory redundancy payment when made redundant. The amount is calculated as follows:

• For each complete year of service aged under 22: half a week's pay
• For each complete year of service aged 22–40: one week's pay
• For each complete year of service aged 41 or over: one and a half week's pay

Service is capped at 20 years, and weekly pay is capped (currently £700 per week, reviewed annually). The maximum statutory redundancy pay is currently £21,000. Your employer may offer enhanced redundancy pay on top of the statutory minimum — check your contract or staff handbook.

Notice Entitlements

In addition to redundancy pay, you are entitled to notice pay. The statutory minimum is one week per year of service, up to a maximum of 12 weeks. Your contract may provide a longer notice period. You must be paid your full pay during the notice period (including for normal working hours), unless your contract allows payment in lieu of notice (PILON).

Be careful about signing any settlement agreement at this stage — settlement agreements typically require you to waive all employment claims in exchange for a financial payment. Always take legal advice before signing one (many employment solicitors provide this free for settlement agreement reviews, as the employer usually pays the legal fees).

Holiday Pay

You are entitled to be paid for all unused holiday accrued but not taken up to your termination date. This includes any holiday that accrued during your notice period. Holiday pay should be calculated on your normal pay, including regular overtime and commission if applicable.

Collective Redundancy Consultation

Where an employer proposes to make 20 or more employees redundant within a 90-day period at the same establishment, collective redundancy consultation obligations apply under the Trade Union and Labour Relations (Consolidation) Act 1992. The employer must:

• Notify the Secretary of State (using form HR1)
• Consult with appropriate representatives (trade union or elected employee representatives)
• Consult in good time — at least 30 days before the first dismissal where 20–99 redundancies are proposed; at least 45 days where 100 or more are proposed

Under the Employment Rights Act 2025, the maximum protective award for failure to collectively consult has doubled from 90 days' pay to 180 days' pay per affected employee. If your employer is making 20 or more people redundant and has not properly consulted, you may have a significant collective claim.

Individual Consultation

Even where collective consultation obligations do not apply (fewer than 20 redundancies), individual consultation is still required for the dismissal to be fair under Section 98(4) of the Employment Rights Act 1996. Your employer must:

• Tell you that you are at risk of redundancy
• Consult with you about the reasons, the selection pool, and selection criteria
• Consider alternatives to redundancy
• Give you the opportunity to suggest alternatives
• Tell you your scores if selection scoring is used, and let you challenge them

Failure to conduct meaningful individual consultation is one of the most common reasons redundancy dismissals are found to be unfair. See the EAT decisions in Valimulla v Al-Khair Foundation [2023] and De Bank Haycocks v ADP RPO UK [2023] for examples of what "meaningful" means.

Unfair Selection for Redundancy

Even if there is a genuine redundancy situation, your selection for redundancy may be unfair if it is based on discriminatory criteria (protected characteristics under the Equality Act 2010), automatically unfair reasons (such as trade union activities, pregnancy, or whistleblowing), or if the selection criteria were applied inconsistently or in bad faith. If you believe you were selected for unfair reasons, you may have a claim for both unfair dismissal and, if discrimination is involved, a discrimination claim.

What to Do Next

If you are facing redundancy: check your contract for enhanced terms, ask for your selection score and criteria in writing, consider whether consultation was genuine, and take advice before signing anything. If you are already redundant: check the redundancy pay calculation, ensure you received full notice pay and holiday pay, and consider whether the selection was fair. Free advice is available from ACAS (0300 123 1100), Citizens Advice, and your trade union if you are a member.