If you close down your business entirely or one particular department, or if you cut your workforce in a particular area of work, your employees may be made redundant and entitled to redundancy payment upon dismissal. 

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Redundancy is a potentially fair reason for dismissal, provided that it is a genuine redundancy situation, and an appropriate procedure has been carried out if the employee has at least 2 years of continuous employment. Failure to follow a fair redundancy procedure when dismissing an employee for redundancy reasons will normally render the dismissal unfair, leading to you paying compensation.

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A fair procedure includes consultation, fair basis for selection, consideration of alternative employment, and opportunity to appeal. 

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Your employees have the right to a 4-week trial period for any alternative employment offered. If they decide the new job is not suitable this will not affect their employment rights, including their right to statutory redundancy pay.

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If an employee has been continuously employed for 2 years by the date their notice period ends, they are allowed a reasonable amount of time off to look for another job and arrange training to help them find another job payable at the rate of 40% of one week’s pay.