Both redundancy and some other substantial reason are potentially fair grounds for dismissal, but how do you know which one applies?
Redundancy is often used as a general term for a situation when an employee or group of employees is no longer needed or it is no longer financially viable to employee them as costs need to be saved. However redundancy has a specific statutory meaning:
● A business closure
● A workplace closure
● A diminished or ceased requirement of the business for employees to do work of a particular kind.
The definition is important because if not met then the dismissal in order to be potentially fair would have to be justified and be for some other substantial reason which is not discriminatory and not automatically unfair. It also determines whether employees are entitled to a statutory redundancy payment and the type of steps that should be followed in order to ensure a fair process.
The most tricky circumstance is a restructure or reorganisation – that may well lead to a redundancy situation. This will likely be the case in circumstances where there is the same amount of work, but less employees are required to do it, there is less work and so less employees are required.
Where there is less work but the same amount of employees are required then that can still be a redundancy dismissal because the hours required to be worked by those employees has reduced. However, where changes need to be made to employees’ contracts e.g. to reduce hours or benefits but there is not diminished requirement for employees performing a particular kind of work then any dismissal is likely to be classified as for some other substantial reason by the employer.