Employee dismissal and redundancy rights

First published on Thursday, Jun 04, 2020

Last updated on Wednesday, Jun 26, 2024

When it comes to employee dismissal and redundancy rights, you need to get them right — or you could face a complaint ending in a costly tribunal decision.

It’s not just about the threat of a dispute though. Running a fair and caring workplace is essential to retaining talent and competing in the job market. Here are the essentials on respecting employees’ dismissal and redundancy rights.

Employee dismissal rights

To dismiss an employee fairly, you must:

  • Give a valid, justified reason that is consistent with how you’ve treated other employees
  • Act reasonably, for example by following a disciplinary procedure that meets the Acas code of practice
  • Treat all employees the same, whether they are part-time or full-time workers
  • Give notice in line with the employment contract and statutory notice requirements

Dismissal of an employee is often surrounded by negative emotions — such as regret at having to let them go, or anger about the conduct that led to the dismissal. It’s vital that you put aside emotional responses, and treat the employee fairly.

The employee’s right to be informed in writing

A dismissed employee who’s been with you two years or more has the right to request a written statement from you, detailing your reasons for dismissal. You must provide the written statement within 14 days of the request.

You must provide a written statement for all employees dismissed while on statutory maternity leave.

Acceptable reasons for dismissal

Valid reasons for dismissing an employee include:

  • Inability to do the job — you should follow disciplinary procedures and support the employee to improve their performance before dismissing them
  • Illness — if the employee has a long-term illness that makes it impossible for them to do the job
  • Summary dismissal — an employee can be dismissed immediately for gross misconduct, such as violent behaviour. You should still carry out a proper investigation before making the dismissal.
  • Another substantial reason — such as the employee being sent to prison, the employee works as a driver but loses their license, or your organisation is no longer in business

The right to claim unfair or constructive dismissal

If you dismiss an employee without good reason, they may be able to take legal action against your organisation.

Dismissal may be ruled unfair at an employment tribunal if you didn’t provide a good reason, or if you didn’t follow a formal disciplinary or dismissal procedure that meets Acas standards.

If an employee feels forced to leave their job, they also have the right to claim constructive dismissal. Employer actions that could force an employee to leave through constructive dismissal include:

  • Sudden, unreasonable changes to the employee’s pay, grade, or working conditions
  • Harassment and bullying at work

Employee redundancy rights

Another potentially valid reason for dismissing an employee is redundancy. You can make employees redundant when you have a business need to reduce your workforce. You can fairly make all of your employees redundant if your business is closing altogether.

Redundancy is fair in most cases, but employees are still protected by important redundancy rights.

The right to be selected fairly for redundancy

As an employer, you must select employees for redundancy fairly. Employees can be made redundant based on their level of skill and experience. They cannot be selected based on their age, gender, disability, ethnicity and so on.

Common selection methods are ‘last in, first out’, asking for volunteers, and using appraisal and disciplinary records.

Redundancy pay rights

Employees who’ve been with you for two years or more are entitled to statutory redundancy pay of:

  • 0.5 week’s pay for each year of service while the employee was aged under 22
  • 1 week’s pay for each year of service while the employee was aged 22-40
  • 1.5 weeks’ pay for each year of service while the employee was 41 or older

Redundancy pay is capped at 20 years’ service, £538 weekly pay, and a total maximum payment of £16,140.

The right to redundancy notice

You must give employees a paid redundancy notice period. Statutory requirements are:

  • 1 week or more for employees who’ve been with you between 1 month and 2 years
  • 1 week for each year of service, for employees with you between 2 and 12 years
  • 12 weeks for employees with you 12 years or more

The right to redundancy consultation

Employees also have the right to a consultation about why they’re being made redundant, and to discuss possible alternatives to redundancy. If you’re making 20 or more employees redundant, one employee or trade union rep should collectively represent the group at consultation.

The consultation must start at least 30 days before dismissal if you’re making 20-99 employees redundant, and at least 45 days before dismissal for over 100 employees.

Lucy Cobb

Employment Law Specialist

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