Redundancy is when you dismiss an employee because you no longer:

• carry out the business for which they are employed
• carry out the business in the place where they are employed
• require them to carry out work of a particular kind
• require them to carry out work of a particular kind in the place where they are employed

For a redundancy to be genuine, you must demonstrate that the employee's job will no longer exist.

In this situation, eligible employees would be entitled to receive a statutory redundancy payment (SRP) - read more on rights of redundant employees.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

You should take reasonable steps to avoid compulsory redundancies by considering alternatives, such as:

• seeking applicants for voluntary redundancy
• seeking applications from existing staff to work flexibly
• laying off self-employed contractors, freelancers, etc
• not using casual labour
• recruitment restrictions
• reducing or banning overtime
• filling vacancies elsewhere in the business with existing employees
• short-time working or temporary lay-offs - see lay-off and short-time working (PDF, 33K)
• agreed variation to working hours, on a temporary or permanent basis
• allowing unpaid career breaks and sabbaticals

Improving business performance

Before considering redundancies you should look at your business by assessing current performance and seeing whether there are other things you can do to improve its output and performance.

Cut costs

Are there areas of your business where you can save money? See:

• ensure customers pay you on time
• saving energy and cutting costs
• saving water and cutting costs

Increase sales

Can your business do more to sell more products or services? See:

• increase your market share
• marketing on a tight budget

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

You can lay-off an employee when you temporarily cannot give them paid work.

You must expressly agree it with them. This could be set out in:

• their contract of employment
• a national agreement for the industry
• a collective agreement between you and a recognised trade union

National and collective agreements can only be enforced if they are incorporated into the employee's contract of employment.

You may also be able to lay-off an employee:

• Where you have clear evidence that shows that laying off employees has been a widely accepted practice in your organisation over a long period of time.
• If you agree with the employee to change their employment contract to allow them to be laid off. This change will not necessarily give you the power to lay off the employee without pay and without their consent in the future. See how to change an employee's terms of employment.

Where there is no formal agreement in place and the employee refuses to agree to be laid off, you may have to consider other options which could include terminating the employee's original contract and offering them a new, revised one.

Terminating the contract would be just one of the options that the employer should consider.

This involves dismissing the employee and could lead to a claim of unfair dismissal.

Wrongful lay-offs

You will be in breach of contract if you lay off an employee without pay if there is no contractual agreement or the employee has not agreed to it.

The employee may:

• choose to accept the breach of contract and treat the contract as continuing, while claiming a guarantee payment
• sue for damages for breach of contract in a civil court or, in certain circumstances, at an industrial tribunal
• bring a claim of unlawful deduction of wages before an industrial tribunal
• claim that your action amounted to a dismissal which could lead to a claim of unfair dismissal and/or for a statutory redundancy payment (SRP)

Statutory guarantee payments (SGP) and lay-offs

Eligible employees are entitled to a statutory guarantee payment if you don't provide them with a full day's work during the time they would normally be required to work. The maximum payment is five days in any three months.

For more information, see guarantee pay: employee entitlement, calculation and exemptions.

Statutory redundancy payments (SRP) and lay-offs

Employees can claim a statutory redundancy payment if the lay-off runs for:

• four consecutive weeks or longer
• any six weeks (with not more than three of the weeks being consecutive, eg the six weeks cannot be made up of a four-week and a two-week period) in a 13-week period

The employee must give you written notice in advance that they intend to make a claim for an SRP. The claim may be contested by the employer if normal working is likely to be resumed within four weeks and there is a reasonable prospect of work for not less than 13 weeks, during which the employee would not be laid off.

There is a strict timetable of requirements, one of which is the resignation of the employee, whereby the employee may ultimately complain to an Industrial Tribunal if they consider that they are entitled to a redundancy payment and it remains unpaid.

See temporary lay-off and short-time working.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

Short-time working is where there is a reduction in the work provided for an employee in a week to the extent that their pay for that week is less than half a week's pay.

You can only put an employee on short-time working where you have expressly agreed it with them. Such an agreement may be set out in:

• their contract of employment
• a national agreement for the industry
• a collective agreement between you and a recognised trade union

National and collective agreements can only be enforced if they are incorporated into the employee's employment contract.

You may also be able to put an employee on short-time working:

• Where you have clear evidence that shows that short-time working has been a widely accepted practice in your organisation over a long period of time.
• If you agree with the employee to change their employment contract to allow them to be put on short-time working. This change will not necessarily give you the power to put the employee on short-time work without their consent in the future. Read more on how to change an employee's terms of employment.

Where there is no contractual agreement already in place and the employee refuses to agree to short-time working, you may have to consider other options which would include terminating the employee's original contract and offering them a new, revised one.

Terminating the contract would only be one of the options that the employer should consider.

However, this involves dismissing the employee and could lead to a claim of unfair dismissal.

See temporary lay-offs and short-time working.

Wrongful short-time working

You will be in breach of contract if you put an employee on short-time work without a contractual agreement or if the employee has not agreed to it.

As a result, the employee may:

• choose to accept the breach of contract and treat the contract as continuing while claiming a guarantee payment
• sue for damages for breach of contract in a civil court or, in certain circumstances, at an industrial tribunal
• bring a claim of unlawful deduction of wages before an industrial tribunal
• claim that your action amounted to a dismissal which could lead to a claim of unfair dismissal and/or for a statutory redundancy payment (SRP)

Statutory guarantee payments (SGP) and short-time working

Eligible employees are entitled to statutory guarantee payment if you don't provide them with work on a day which they would normally be required to work. The maximum payment is five days in any three months.

See guarantee pay: employee entitlement.

Statutory redundancy payments (SRP) and short-time working

Employees can claim a statutory redundancy payment if the short-time working runs for:

• four consecutive weeks or longer, or
• any six weeks (with not more than three of the weeks being consecutive) in a 13-week period

Under the short-time working provisions of the legislation, employees who are put on short-time working and receive less than half a week's pay for four consecutive weeks, or any six weeks (no more than three of the weeks being consecutive eg the six weeks cannot be made up of a four week and a two week period) in a thirteen week period, may also claim a redundancy payment from their employer. The claim must be in writing and may be contested by the employer if normal working is likely to be resumed within four weeks and there is a reasonable prospect of work for not less than 13 weeks, during which the employee would not be put on short-time.

There is a strict timetable of requirements, one of which is the resignation of the employee, whereby the employee may ultimately complain to an Industrial Tribunal if they consider that they are entitled to a redundancy payment and it remains unpaid.

The employee must give you written notice in advance that they intend to make a claim for an SRP.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

Non-compulsory redundancy covers voluntary redundancy.

You could ask employees if they would like to volunteer for redundancy and then select those to be made redundant.

Voluntary redundancy advantages

• It is less demoralising and disruptive than compulsory redundancy.
• It helps identify employees who are willing to accept redundancy.

Voluntary redundancy disadvantages

• It could work out to be more expensive as you may need to offer enhanced redundancy payments to attract people to leave.
• Management reserves the right to turn down offers from those volunteering to be made redundant.
• There is also the risk that employees not granted their voluntary redundancy request may react negatively and you could also end up with an imbalance of skills and experience.

See redundancy letters, forms, and templates.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

Employment document toolkit

The LRA also has a free employment document toolkit. Once employers are registered they can unlock free employment guides to them build documents, policies, and procedures for their own organisation. Find out about the LRA's employment document toolkit.

If you decide to make compulsory redundancies you will need to:

• create an objective and non-discriminatory redundancy selection criteria
• identify the pool of employees from which all or some employees will be made redundant

Redundancy selection criteria

The criteria that can be used to select employees for redundancy can include:

• skills, qualifications, and aptitude
• standard of work performance
• attendance/disciplinary record
• experience

Criteria used should be verifiable, ie you should have supporting, objective evidence of it. It should be precisely defined, non-discriminatory, and applied consistently, to avoid the possibility of unlawful discrimination.

Download redundancy procedure (PDF, 319K) and sample redundancy selection matrix template (DOC, 17K).

Automatically unfair selection criteria

Some criteria will make any subsequent redundancy dismissal automatically unfair.

You should not select an employee for redundancy because of issues related to:

• trade union membership or non-membership
• lawful industrial action lasting up to 12 weeks
• being an employee representative
• actions taken on specified health and safety grounds
• pregnancy, maternity, paternity, adoption, and parental leave
• part-time or fixed-term contract status

For a complete list, see unfair dismissal.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

If you fail to consult employees in a redundancy situation, any redundancies made will almost certainly be unfair.

Collective redundancy notification

A collective redundancy is when you plan to make 20 or more employees redundant at one establishment within a 90-day period.

Steps you must take:

Advance notification of redundancies

Fill in advance notification of redundancies form HR1. You must provide advance notification of redundancies to the Northern Ireland Statistics and Research Agency by completing the online form. This information is collated and passed onto the Department for the Economy (DfE) and Department for Communities (DfC) for information.

Consult with workplace representatives

These may be either trade union representatives and/or elected employee representatives for those employees not represented by a union. If your employees choose not to elect employee representatives, you must give the relevant information directly to each individual.

Collective redundancy consultation

Consultation must start when you are developing redundancy proposals and at least:

• 30 days before the first redundancy where there are 20 to 99 proposed redundancies
• 90 days before the first redundancy where there are 100 or more proposed redundancies

An employer who has already begun consultations about one group of proposed redundancy dismissals and later finds it necessary to make a further group redundant does not have to add the numbers of employees together to calculate the minimum period for either group.

It is not necessary that consultation should last for all of that time. Further, where consultation has not been completed by the end of the 30 or 90-day period, employers should continue the consultation beyond the 30 or 90-day period.

In other words, the consultation has either resulted in an agreement with employee representatives or has otherwise reached its conclusion. If consultation has been completed within the 30 or 90-day period, the employer may issue the notices of dismissal at that point. As referred to above, employers should consult beyond the 30 or 90-day minimum where the consultations are not yet complete but in some cases, it could be longer where the combination of the consultation and the notice exceeds the period. This timetable can be shortened when an employee decides to leave early or take voluntary redundancy.

The obligations may apply even when an employer intends to offer alternative employment on different terms and conditions to some or all of the employees, with the result that the number actually dismissed is less than twenty or in fact where no dismissals occur; this will be the case if employees are to be re-deployed on such radically different terms and conditions that accepting the new posts amounts to dismissal and re-engagement.

The obligations apply to compulsory redundancies, but in some circumstances may also apply to 'voluntary' redundancies if an employee has no real choice whether to stay or to leave.

If you fail to carry out collective redundancy consultation, affected employees may claim a protective award from an Industrial Tribunal - see potential problems following redundancy.

It is good practice to consult employee or trade union representatives even if fewer than 20 redundancies are planned.

In addition, where there are no representatives present or when there are no representatives elected to conduct consultation, it is good practice to meet with all individuals who are at risk of redundancy, regardless of whether it affects more or less than 20 employees.

DfE must receive the advanced notification of redundancies on form HR1 at least:

• 30 days before the first redundancy where there are 20 to 99 proposed redundancies and before the individuals have received personal notice of termination
• 90 days before the first redundancy where there are 100 or more proposed redundancies and before the individuals have received personal notice of termination

Late notification, or failure to notify, is an offence and you may be liable to a fine of up to £5,000.

Redundancy: information and consultation (I&C) agreements

If you have an I&C agreement in place, you have a duty to inform and consult employees or their representatives on changes to the workforce. This means that you may have to inform and consult on any proposed redundancies.

You do not have to inform and consult at the same time under both the redundancy and the I&C legislation - you can choose instead to 'opt out' of your I&C agreement and consult under the redundancy legislation only.

What information must you provide?

At the start of the consultation, you must provide written details of:

• the reasons for redundancies
• the numbers and categories of employees involved
• the total numbers of employees in these categories
• how you plan to select employees for redundancy
• how you will carry out redundancies
• how you will work out redundancy payments
• agency workers: the number of agency workers, where they are working in the business, and the type of work they are contracted to undertake

Consultation does not have to end in agreement, but it must be properly carried out with a view to reaching an agreement, including ways of avoiding redundancies or reducing their effect.

Individual redundancy consultation

You should consult employees individually regardless of the number you plan to make redundant. While there are no fixed timescales within which this consultation must take place it should be of a sufficient timescale to be meaningful in the individual circumstances.

If you fail to do so, any subsequent dismissals may be unfair - see unfair dismissal.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

Redundant employees have a number of rights and may be entitled to receive a statutory redundancy payment (SRP).

The right to receive an SRP

To receive an SRP, an individual must:

• be an employee working under a contract of employment
• have at least two years' continuous service - see continuous employment and employee rights
• have been dismissed, laid off, or put on short-term work (and have a qualifying period of lay-off)

Temporary lay-off and short-time working - Labour Relations Agency (LRA) guidance.

A redundant employee also has the right to receive a written statement setting out the amount of any redundancy payment and how you worked it out.

You must make the payment when or soon after you dismiss the employee.

How is an SRP calculated?

An SRP is based on an employee's age and length of employment and is counted back from the date of dismissal. Employees receive:

• 1.5 weeks' pay for each year of employment after their 41st birthday
• one week's pay for each year of employment after their 22nd birthday
• half a week's pay for each year of employment up to their 22nd birthday

Their length of service is capped at 20 years. Weekly pay is subject to the statutory limit which is £729 (since 6 April 2024). The maximum SRP payable is £21,870 (since 6 April 2024). These figures are normally reviewed each financial year.

Calculate the statutory redundancy pay due to your employee.

Taxation of SRPs

SRP is not taxable, as it's not more than £30,000. Any redundancy payment you make in addition to SRP is subject to tax and National Insurance (NI).

Other termination payments made to the employee at the same time - like payment in lieu of holiday - must have tax and NI deducted.

Failure to make an SRP

If an employee disagrees with the amount, or you fail to pay SRP, the employee has six months from the date their employment ended to make a claim for payment to an Industrial Tribunal.

All other complaints in relation to payments received on termination of employment due to redundancy for eg notice pay or holiday pay must be made to an Industrial Tribunal within three months from the date the employment ended.

If they fail to make the claim for redundancy payment in time, a tribunal still has the power for a further six months to decide whether or not the employee should receive an SRP.

Other redundancy rights

Employees under a notice of redundancy also have the right to:

• Be offered suitable alternative employment.
• Have a trial period in alternative employment without losing their right to an SRP.
• A reasonable amount of time off to look for another job or to arrange training. This applies where the employee has been employed for at least two years. The employer does not have to pay more than two-fifths of a week's pay, no matter how much time off they give the employee.
• Not be unfairly selected for redundancy - see unfair dismissal.

Offers of alternative work

Even if you have selected an employee for redundancy, you could still avoid dismissals by offering them alternative work.

For an offer to be valid:

• the job must actually be offered to the employee and the employee shouldn't have to apply
• the offer should be unconditional and in writing
• the offer must be made before the employee's current contract ends
• the offer should show how the new job differs from the old
• the new job must either start straight after the end of the old job or within four weeks

Employees who accept an offer of alternative work are allowed a four-week trial period to see if the work is suitable. The four-week trial period can be extended by agreement for training purposes only.

An agreement for an extended trial period must be in writing and be made before the employee starts work under the new contract. It must state the date on which the period of retraining will end and specify the terms and conditions of employment that will apply after the end of the retraining period.

They may still claim a statutory redundancy payment (SRP) if you both agree that the work is not suitable. If you think the job is suitable but the employee unreasonably refuses to take it, they may lose any entitlement to an SRP.

Alternatives to redundancy (PDF, 33K).

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

Try to find ways of helping employees come to terms with their situation.

How employers can help redundant employees

You could:

• consider re-employment to other roles within the business
• advise them to contact their local Jobs & Benefits office - your local Jobs and Benefits Office can provide advice if any employees being made redundant are under 18
• contact other local employers who may have vacancies
• offer advice on searching for suitable vacancies in the press and on the internet
• offer guidance on CVs, job application forms and interview techniques - see applying for jobs
• make them aware of the assistance available from the Careers Service
• provide clear information on the amount of redundancy pay and how it affects pension payments and state benefits
• point out the need for the employee to discuss the financial implications of redundancy with their family as early as possible
• consider other support, such as financial advice, or counselling support

See coping with redundancy.

Additional help with redundancy

Redundancy Payments Service

If you require further information or advice with an ongoing redundancy claim, you can call the Department for the Economy's Redundancy Payments Service on Tel 028 9025 7562 or email: rpsquery@economy-ni.gov.uk.

For general advice on redundancies, you can get help from the Labour Relations Agency (LRA) Helpline on Tel 03300 555 300.

Redundancy Service

The Department for Communities (DfC) offers a Redundancy Service to help employers and employees through the process of redundancy. A redundancy clinic webinar is also available to help employers and employees affected by redundancy.

For further help you can also email: dfcemployerservices@communities-ni.gov.uk.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

An eligible employee can claim unfair dismissal if they feel employers:

• have unfairly selected them for redundancy or incorrectly applied the selection criteria
• failed to offer suitable alternative work where it was available
• didn't follow the proper consultation process

Employees may also be able to claim a protective award if employers fail to properly consult with employee representatives, ie trade union or elected employee representatives in collective redundancy situations. See rights of redundant employees.

Unfair redundancy selection

An employee will have been automatically unfairly dismissed if you select them for redundancy for certain reasons eg involving discrimination or whistleblowing. If you select the employee for redundancy for any of these reasons, they will be able to make an unfair dismissal claim regardless of how long they have been in your employment.

Failure to properly consult

If you fail to properly carry out collective redundancy consultation, a complaint may be made to an Industrial Tribunal by:

• a trade union or elected employee representatives
• individual employees who have been dismissed as redundant where there is no recognised trade union and the employees have chosen not to elect employee representatives

The tribunal may award up to 90 days' pay to each affected employee.

See the redundancy consultation process.

The Department for the Economy (DfE) may also prosecute you for failure to notify the proposed redundancies in advance.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

Further information

If you require further information or advice with an ongoing redundancy claim, you can call DfE's Redundancy Payments Service on Tel 028 9025 7562 or email rpsquery@economy-ni.gov.uk.

For general information on redundancies, you can contact the Labour Relations Agency (LRA) Helpline on Tel 03300 555 300.

Redundancy is when you dismiss an employee because you no longer:

• carry out the business for which they are employed
• carry out the business in the place where they are employed
• require them to carry out work of a particular kind
• require them to carry out work of a particular kind in the place where they are employed

For a redundancy to be genuine, you must demonstrate that the employee's job will no longer exist.

In this situation, eligible employees would be entitled to receive a statutory redundancy payment (SRP) - read more on rights of redundant employees.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

You should take reasonable steps to avoid compulsory redundancies by considering alternatives, such as:

• seeking applicants for voluntary redundancy
• seeking applications from existing staff to work flexibly
• laying off self-employed contractors, freelancers, etc
• not using casual labour
• recruitment restrictions
• reducing or banning overtime
• filling vacancies elsewhere in the business with existing employees
• short-time working or temporary lay-offs - see lay-off and short-time working (PDF, 33K)
• agreed variation to working hours, on a temporary or permanent basis
• allowing unpaid career breaks and sabbaticals

Improving business performance

Before considering redundancies you should look at your business by assessing current performance and seeing whether there are other things you can do to improve its output and performance.

Cut costs

Are there areas of your business where you can save money? See:

• ensure customers pay you on time
• saving energy and cutting costs
• saving water and cutting costs

Increase sales

Can your business do more to sell more products or services? See:

• increase your market share
• marketing on a tight budget

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

You can lay-off an employee when you temporarily cannot give them paid work.

You must expressly agree it with them. This could be set out in:

• their contract of employment
• a national agreement for the industry
• a collective agreement between you and a recognised trade union

National and collective agreements can only be enforced if they are incorporated into the employee's contract of employment.

You may also be able to lay-off an employee:

• Where you have clear evidence that shows that laying off employees has been a widely accepted practice in your organisation over a long period of time.
• If you agree with the employee to change their employment contract to allow them to be laid off. This change will not necessarily give you the power to lay off the employee without pay and without their consent in the future. See how to change an employee's terms of employment.

Where there is no formal agreement in place and the employee refuses to agree to be laid off, you may have to consider other options which could include terminating the employee's original contract and offering them a new, revised one.

Terminating the contract would be just one of the options that the employer should consider.

This involves dismissing the employee and could lead to a claim of unfair dismissal.

Wrongful lay-offs

You will be in breach of contract if you lay off an employee without pay if there is no contractual agreement or the employee has not agreed to it.

The employee may:

• choose to accept the breach of contract and treat the contract as continuing, while claiming a guarantee payment
• sue for damages for breach of contract in a civil court or, in certain circumstances, at an industrial tribunal
• bring a claim of unlawful deduction of wages before an industrial tribunal
• claim that your action amounted to a dismissal which could lead to a claim of unfair dismissal and/or for a statutory redundancy payment (SRP)

Statutory guarantee payments (SGP) and lay-offs

Eligible employees are entitled to a statutory guarantee payment if you don't provide them with a full day's work during the time they would normally be required to work. The maximum payment is five days in any three months.

For more information, see guarantee pay: employee entitlement, calculation and exemptions.

Statutory redundancy payments (SRP) and lay-offs

Employees can claim a statutory redundancy payment if the lay-off runs for:

• four consecutive weeks or longer
• any six weeks (with not more than three of the weeks being consecutive, eg the six weeks cannot be made up of a four-week and a two-week period) in a 13-week period

The employee must give you written notice in advance that they intend to make a claim for an SRP. The claim may be contested by the employer if normal working is likely to be resumed within four weeks and there is a reasonable prospect of work for not less than 13 weeks, during which the employee would not be laid off.

There is a strict timetable of requirements, one of which is the resignation of the employee, whereby the employee may ultimately complain to an Industrial Tribunal if they consider that they are entitled to a redundancy payment and it remains unpaid.

See temporary lay-off and short-time working.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

Short-time working is where there is a reduction in the work provided for an employee in a week to the extent that their pay for that week is less than half a week's pay.

You can only put an employee on short-time working where you have expressly agreed it with them. Such an agreement may be set out in:

• their contract of employment
• a national agreement for the industry
• a collective agreement between you and a recognised trade union

National and collective agreements can only be enforced if they are incorporated into the employee's employment contract.

You may also be able to put an employee on short-time working:

• Where you have clear evidence that shows that short-time working has been a widely accepted practice in your organisation over a long period of time.
• If you agree with the employee to change their employment contract to allow them to be put on short-time working. This change will not necessarily give you the power to put the employee on short-time work without their consent in the future. Read more on how to change an employee's terms of employment.

Where there is no contractual agreement already in place and the employee refuses to agree to short-time working, you may have to consider other options which would include terminating the employee's original contract and offering them a new, revised one.

Terminating the contract would only be one of the options that the employer should consider.

However, this involves dismissing the employee and could lead to a claim of unfair dismissal.

See temporary lay-offs and short-time working.

Wrongful short-time working

You will be in breach of contract if you put an employee on short-time work without a contractual agreement or if the employee has not agreed to it.

As a result, the employee may:

• choose to accept the breach of contract and treat the contract as continuing while claiming a guarantee payment
• sue for damages for breach of contract in a civil court or, in certain circumstances, at an industrial tribunal
• bring a claim of unlawful deduction of wages before an industrial tribunal
• claim that your action amounted to a dismissal which could lead to a claim of unfair dismissal and/or for a statutory redundancy payment (SRP)

Statutory guarantee payments (SGP) and short-time working

Eligible employees are entitled to statutory guarantee payment if you don't provide them with work on a day which they would normally be required to work. The maximum payment is five days in any three months.

See guarantee pay: employee entitlement.

Statutory redundancy payments (SRP) and short-time working

Employees can claim a statutory redundancy payment if the short-time working runs for:

• four consecutive weeks or longer, or
• any six weeks (with not more than three of the weeks being consecutive) in a 13-week period

Under the short-time working provisions of the legislation, employees who are put on short-time working and receive less than half a week's pay for four consecutive weeks, or any six weeks (no more than three of the weeks being consecutive eg the six weeks cannot be made up of a four week and a two week period) in a thirteen week period, may also claim a redundancy payment from their employer. The claim must be in writing and may be contested by the employer if normal working is likely to be resumed within four weeks and there is a reasonable prospect of work for not less than 13 weeks, during which the employee would not be put on short-time.

There is a strict timetable of requirements, one of which is the resignation of the employee, whereby the employee may ultimately complain to an Industrial Tribunal if they consider that they are entitled to a redundancy payment and it remains unpaid.

The employee must give you written notice in advance that they intend to make a claim for an SRP.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

Non-compulsory redundancy covers voluntary redundancy.

You could ask employees if they would like to volunteer for redundancy and then select those to be made redundant.

Voluntary redundancy advantages

• It is less demoralising and disruptive than compulsory redundancy.
• It helps identify employees who are willing to accept redundancy.

Voluntary redundancy disadvantages

• It could work out to be more expensive as you may need to offer enhanced redundancy payments to attract people to leave.
• Management reserves the right to turn down offers from those volunteering to be made redundant.
• There is also the risk that employees not granted their voluntary redundancy request may react negatively and you could also end up with an imbalance of skills and experience.

See redundancy letters, forms, and templates.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

Employment document toolkit

The LRA also has a free employment document toolkit. Once employers are registered they can unlock free employment guides to them build documents, policies, and procedures for their own organisation. Find out about the LRA's employment document toolkit.

If you decide to make compulsory redundancies you will need to:

• create an objective and non-discriminatory redundancy selection criteria
• identify the pool of employees from which all or some employees will be made redundant

Redundancy selection criteria

The criteria that can be used to select employees for redundancy can include:

• skills, qualifications, and aptitude
• standard of work performance
• attendance/disciplinary record
• experience

Criteria used should be verifiable, ie you should have supporting, objective evidence of it. It should be precisely defined, non-discriminatory, and applied consistently, to avoid the possibility of unlawful discrimination.

Download redundancy procedure (PDF, 319K) and sample redundancy selection matrix template (DOC, 17K).

Automatically unfair selection criteria

Some criteria will make any subsequent redundancy dismissal automatically unfair.

You should not select an employee for redundancy because of issues related to:

• trade union membership or non-membership
• lawful industrial action lasting up to 12 weeks
• being an employee representative
• actions taken on specified health and safety grounds
• pregnancy, maternity, paternity, adoption, and parental leave
• part-time or fixed-term contract status

For a complete list, see unfair dismissal.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

If you fail to consult employees in a redundancy situation, any redundancies made will almost certainly be unfair.

Collective redundancy notification

A collective redundancy is when you plan to make 20 or more employees redundant at one establishment within a 90-day period.

Steps you must take:

Advance notification of redundancies

Fill in advance notification of redundancies form HR1. You must provide advance notification of redundancies to the Northern Ireland Statistics and Research Agency by completing the online form. This information is collated and passed onto the Department for the Economy (DfE) and Department for Communities (DfC) for information.

Consult with workplace representatives

These may be either trade union representatives and/or elected employee representatives for those employees not represented by a union. If your employees choose not to elect employee representatives, you must give the relevant information directly to each individual.

Collective redundancy consultation

Consultation must start when you are developing redundancy proposals and at least:

• 30 days before the first redundancy where there are 20 to 99 proposed redundancies
• 90 days before the first redundancy where there are 100 or more proposed redundancies

An employer who has already begun consultations about one group of proposed redundancy dismissals and later finds it necessary to make a further group redundant does not have to add the numbers of employees together to calculate the minimum period for either group.

It is not necessary that consultation should last for all of that time. Further, where consultation has not been completed by the end of the 30 or 90-day period, employers should continue the consultation beyond the 30 or 90-day period.

In other words, the consultation has either resulted in an agreement with employee representatives or has otherwise reached its conclusion. If consultation has been completed within the 30 or 90-day period, the employer may issue the notices of dismissal at that point. As referred to above, employers should consult beyond the 30 or 90-day minimum where the consultations are not yet complete but in some cases, it could be longer where the combination of the consultation and the notice exceeds the period. This timetable can be shortened when an employee decides to leave early or take voluntary redundancy.

The obligations may apply even when an employer intends to offer alternative employment on different terms and conditions to some or all of the employees, with the result that the number actually dismissed is less than twenty or in fact where no dismissals occur; this will be the case if employees are to be re-deployed on such radically different terms and conditions that accepting the new posts amounts to dismissal and re-engagement.

The obligations apply to compulsory redundancies, but in some circumstances may also apply to 'voluntary' redundancies if an employee has no real choice whether to stay or to leave.

If you fail to carry out collective redundancy consultation, affected employees may claim a protective award from an Industrial Tribunal - see potential problems following redundancy.

It is good practice to consult employee or trade union representatives even if fewer than 20 redundancies are planned.

In addition, where there are no representatives present or when there are no representatives elected to conduct consultation, it is good practice to meet with all individuals who are at risk of redundancy, regardless of whether it affects more or less than 20 employees.

DfE must receive the advanced notification of redundancies on form HR1 at least:

• 30 days before the first redundancy where there are 20 to 99 proposed redundancies and before the individuals have received personal notice of termination
• 90 days before the first redundancy where there are 100 or more proposed redundancies and before the individuals have received personal notice of termination

Late notification, or failure to notify, is an offence and you may be liable to a fine of up to £5,000.

Redundancy: information and consultation (I&C) agreements

If you have an I&C agreement in place, you have a duty to inform and consult employees or their representatives on changes to the workforce. This means that you may have to inform and consult on any proposed redundancies.

You do not have to inform and consult at the same time under both the redundancy and the I&C legislation - you can choose instead to 'opt out' of your I&C agreement and consult under the redundancy legislation only.

What information must you provide?

At the start of the consultation, you must provide written details of:

• the reasons for redundancies
• the numbers and categories of employees involved
• the total numbers of employees in these categories
• how you plan to select employees for redundancy
• how you will carry out redundancies
• how you will work out redundancy payments
• agency workers: the number of agency workers, where they are working in the business, and the type of work they are contracted to undertake

Consultation does not have to end in agreement, but it must be properly carried out with a view to reaching an agreement, including ways of avoiding redundancies or reducing their effect.

Individual redundancy consultation

You should consult employees individually regardless of the number you plan to make redundant. While there are no fixed timescales within which this consultation must take place it should be of a sufficient timescale to be meaningful in the individual circumstances.

If you fail to do so, any subsequent dismissals may be unfair - see unfair dismissal.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

Redundant employees have a number of rights and may be entitled to receive a statutory redundancy payment (SRP).

The right to receive an SRP

To receive an SRP, an individual must:

• be an employee working under a contract of employment
• have at least two years' continuous service - see continuous employment and employee rights
• have been dismissed, laid off, or put on short-term work (and have a qualifying period of lay-off)

Temporary lay-off and short-time working - Labour Relations Agency (LRA) guidance.

A redundant employee also has the right to receive a written statement setting out the amount of any redundancy payment and how you worked it out.

You must make the payment when or soon after you dismiss the employee.

How is an SRP calculated?

An SRP is based on an employee's age and length of employment and is counted back from the date of dismissal. Employees receive:

• 1.5 weeks' pay for each year of employment after their 41st birthday
• one week's pay for each year of employment after their 22nd birthday
• half a week's pay for each year of employment up to their 22nd birthday

Their length of service is capped at 20 years. Weekly pay is subject to the statutory limit which is £729 (since 6 April 2024). The maximum SRP payable is £21,870 (since 6 April 2024). These figures are normally reviewed each financial year.

Calculate the statutory redundancy pay due to your employee.

Taxation of SRPs

SRP is not taxable, as it's not more than £30,000. Any redundancy payment you make in addition to SRP is subject to tax and National Insurance (NI).

Other termination payments made to the employee at the same time - like payment in lieu of holiday - must have tax and NI deducted.

Failure to make an SRP

If an employee disagrees with the amount, or you fail to pay SRP, the employee has six months from the date their employment ended to make a claim for payment to an Industrial Tribunal.

All other complaints in relation to payments received on termination of employment due to redundancy for eg notice pay or holiday pay must be made to an Industrial Tribunal within three months from the date the employment ended.

If they fail to make the claim for redundancy payment in time, a tribunal still has the power for a further six months to decide whether or not the employee should receive an SRP.

Other redundancy rights

Employees under a notice of redundancy also have the right to:

• Be offered suitable alternative employment.
• Have a trial period in alternative employment without losing their right to an SRP.
• A reasonable amount of time off to look for another job or to arrange training. This applies where the employee has been employed for at least two years. The employer does not have to pay more than two-fifths of a week's pay, no matter how much time off they give the employee.
• Not be unfairly selected for redundancy - see unfair dismissal.

Offers of alternative work

Even if you have selected an employee for redundancy, you could still avoid dismissals by offering them alternative work.

For an offer to be valid:

• the job must actually be offered to the employee and the employee shouldn't have to apply
• the offer should be unconditional and in writing
• the offer must be made before the employee's current contract ends
• the offer should show how the new job differs from the old
• the new job must either start straight after the end of the old job or within four weeks

Employees who accept an offer of alternative work are allowed a four-week trial period to see if the work is suitable. The four-week trial period can be extended by agreement for training purposes only.

An agreement for an extended trial period must be in writing and be made before the employee starts work under the new contract. It must state the date on which the period of retraining will end and specify the terms and conditions of employment that will apply after the end of the retraining period.

They may still claim a statutory redundancy payment (SRP) if you both agree that the work is not suitable. If you think the job is suitable but the employee unreasonably refuses to take it, they may lose any entitlement to an SRP.

Alternatives to redundancy (PDF, 33K).

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

Try to find ways of helping employees come to terms with their situation.

How employers can help redundant employees

You could:

• consider re-employment to other roles within the business
• advise them to contact their local Jobs & Benefits office - your local Jobs and Benefits Office can provide advice if any employees being made redundant are under 18
• contact other local employers who may have vacancies
• offer advice on searching for suitable vacancies in the press and on the internet
• offer guidance on CVs, job application forms and interview techniques - see applying for jobs
• make them aware of the assistance available from the Careers Service
• provide clear information on the amount of redundancy pay and how it affects pension payments and state benefits
• point out the need for the employee to discuss the financial implications of redundancy with their family as early as possible
• consider other support, such as financial advice, or counselling support

See coping with redundancy.

Additional help with redundancy

Redundancy Payments Service

If you require further information or advice with an ongoing redundancy claim, you can call the Department for the Economy's Redundancy Payments Service on Tel 028 9025 7562 or email: rpsquery@economy-ni.gov.uk.

For general advice on redundancies, you can get help from the Labour Relations Agency (LRA) Helpline on Tel 03300 555 300.

Redundancy Service

The Department for Communities (DfC) offers a Redundancy Service to help employers and employees through the process of redundancy. A redundancy clinic webinar is also available to help employers and employees affected by redundancy.

For further help you can also email: dfcemployerservices@communities-ni.gov.uk.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

An eligible employee can claim unfair dismissal if they feel employers:

• have unfairly selected them for redundancy or incorrectly applied the selection criteria
• failed to offer suitable alternative work where it was available
• didn't follow the proper consultation process

Employees may also be able to claim a protective award if employers fail to properly consult with employee representatives, ie trade union or elected employee representatives in collective redundancy situations. See rights of redundant employees.

Unfair redundancy selection

An employee will have been automatically unfairly dismissed if you select them for redundancy for certain reasons eg involving discrimination or whistleblowing. If you select the employee for redundancy for any of these reasons, they will be able to make an unfair dismissal claim regardless of how long they have been in your employment.

Failure to properly consult

If you fail to properly carry out collective redundancy consultation, a complaint may be made to an Industrial Tribunal by:

• a trade union or elected employee representatives
• individual employees who have been dismissed as redundant where there is no recognised trade union and the employees have chosen not to elect employee representatives

The tribunal may award up to 90 days' pay to each affected employee.

See the redundancy consultation process.

The Department for the Economy (DfE) may also prosecute you for failure to notify the proposed redundancies in advance.

Redundancy webinar

The Labour Relations Agency (LRA) redundancy webinar recording provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.

Further information

If you require further information or advice with an ongoing redundancy claim, you can call DfE's Redundancy Payments Service on Tel 028 9025 7562 or email rpsquery@economy-ni.gov.uk.

For general information on redundancies, you can contact the Labour Relations Agency (LRA) Helpline on Tel 03300 555 300.