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When an employee's role has diminished or disappeared such that it is no longer required by the employer.
The term redundancy is a statutory definition found at s 139 (1) of the Employment Rights Act 1996. A redundancy situation can arise when an employer ceases to carry on (a) the business (b) the business at the current place of work (c) the particular work for which the employee is employed or (d) the particular work at the place where the employee is employed. It is lawful for an employer to terminate an employee's employment on grounds of redundancy if the redundancy situation falls in one of the above categories.
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Drafting checklist for claim or response—unfair dismissal: redundancy Both parties • Was the Claimant an employee? See Practice Notes: Entitlement to claim unfair dismissal—Eligibility and Employee status • Did the Claimant have requisite qualifying service, or does an exception apply? See Practice Note: Qualifying period for unfair dismissal • Has the Claimant complied with the requirement for early conciliation or does one of the exemptions apply? See Practice Note: The early conciliation requirement • Is the claim brought within the three-month time limit, or the period as extended if the requirement for early conciliation applies? See Practice Notes: Unfair dismissal time limit and The early conciliation requirement—Extension to time limits (the 'stop the clock' provisions) • Is the contract of employment arguably void for illegality? See Practice Note: Entitlement to claim unfair dismissal—Illegality • Does the Claimant fall within a category of employee excluded from unfair dismissal protection, eg police constables. See Practice Note: Entitlement to claim unfair dismissal—Particular types of employment • Was the Claimant’s work based in Great...
Redundancy—individual consultation checklist for employers This Checklist outlines steps to be taken in individual redundancy consultation, whether or not consultation has also taken place at a collective level. It sets out practical considerations involved in planning a redundancy process and covers what should be discussed at open meetings with affected employees, what should be included in letters to affected employees, what should be discussed at individual consultation meetings, what should be included in the notice of dismissal and information to be given about the right of appeal. For further guidance on individual redundancy consultation obligations generally, see Practice Notes: Redundancy—fair procedure: individual consultation and How to carry out individual redundancy consultation. This Checklist assumes that the employer has determined whether collective consultation is required (see Checklist: Redundancy—collective consultation checklist for employers—Identify redundancy situation). This Checklist is to be used: • where there is an obligation to consult collectively as, even where that obligation is fulfilled, the employer must still consult individually with the employees • where there is no obligation...
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This Practice Note examines the two different statutory definitions of 'redundancy'.The first is found in the Employment Rights Act 1996 (ERA 1996). Whether or not it is satisfied determines:•whether an employee may be entitled to a statutory redundancy payment (see Practice Note: Entitlement to statutory redundancy payment)•whether, in the context of an unfair dismissal claim, the reason for dismissal is redundancy (which is one of the potentially fair reasons for dismissal—see Practice Note: Reason for dismissal—redundancy)For further information regarding this first definition, see: Redundancy payment entitlement, and fair reason for dismissal, below.The second statutory definition is found in the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A 1992), and is relevant in collective redundancy situations. This definition must be satisfied (as well as other criteria) before the obligation to inform and consult appropriate representatives will arise (see Practice Note: Collective redundancy—the triggers for the statutory consultation obligations).For further information regarding this second definition, see: Definition of redundancy for collective redundancy consultation, below.In many redundancy situations, whether the dismissal satisfies...
Redundancy is one of five ways in which an employment contract may be terminated unilaterally by an employer where such termination will be potentially a fair dismissal. The other four potentially fair reasons for dismissal are:•the employee is not capable of performing the job•the employee’s conduct is incompatible with continued employment•the employee cannot continue in the job without contravention of a legal restriction, or•the residual category of ‘some other substantial reason’Section 309 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) provides that ‘no liability to income tax in respect of employment income other than earnings arises by virtue of a redundancy payment or an approved contractual payment, except where it does so by virtue of Chapter 3 of Part 6 (payments and benefits on termination of employment etc)’. In other words, statutory redundancy payments, and contractual payments made under section 157 of the Employment Rights Act 1996 (ERA 1996) (where trade unions and employers agree that a contractual scheme will override entitlement to redundancy pay—such arrangements are...
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Policy—regulatory references 1 Introduction 1.1 The Financial Conduct Authority (FCA) and the Prudential Regulation authority (PRA) (together the Regulators) require firms that are authorised by the Regulators (and subject to the Senior Managers and Certification Regime (SM&CR)) to request regulatory references if they are considering:. 1.1.1 permitting or appointing someone to perform a senior management function; 1.1.2 issuing a certificate under the certification regime; and/or 1.1.3 appointing a non-executive board director. 1.2 These regulatory references are designed to assist prospective employers to assess whether an individual applying for an applicable regulated function is fit and proper to hold that role. 1.3 To enable a prospective employer to assess the fitness and propriety of a candidate for a regulated function, organisations that fall within the SM&CR must provide upon request a regulatory reference that covers the individual for the preceding six years (and, in certain circumstances, longer). It is essential that we comply with our regulatory obligations in obtaining and in responding to such requests, as the failure to...
Legal due diligence questionnaire—asset purchase—employment Definitions In this questionnaire, the following words and phrases have the meaning set out opposite them. [CA 2006 • the Companies Act 2006;] [Business • the business of [insert description of the business] operated by the Seller and all other activities including those ancillary or incidental to or in connection with such business as carried on by the Seller;] Buyer • [insert name of buyer] Limited incorporated in England and Wales under number [insert company number]; Employee • any person employed or engaged to work in, or assigned to, the Business[, including any based overseas]; EqA 2010 • means the Equality Act 2010; ERA 1996 • the Employment Rights Act 1996; Group • the Seller and each of the Subsidiaries (including [insert names of companies that may not fall under definition of subsidiary from CA 2006]) and Group Company means any of them; pseudonymised • where information is processed in such a way that names or other identifiers that can be easily...
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Where a termination clause permits termination when a party ceases to carry on business, is there a legal definition of ‘ceases to carry on business’? Does the party have to fully terminate all business activities to be deemed to cease to carry on business? If the party ceases a substantial part of its business or is winding down (making 80% of its staff redundant or closing down warehouses), would it be sufficient to be deemed to ‘cease to carry on business’? Termination clauses Termination clauses typically provide for an agreement to be ended on notice or with immediate effect upon specified events occurring, such as material or persistent breach of its terms or insolvency. They are interpreted in the same way as other terms of commercial agreements. For further guidance, see Practice Note: Contract interpretation—the guiding principles and Formation and interpretation—overview. Clauses giving the right to terminate on the cessation of business are usually combined with a clause giving such right on the insolvency of the other...
Where the employer has sought to vary the terms of employment by reducing the employee’s entitlement to contractual redundancy pay, but the employee did not agree to the change, do the old contractual redundancy terms or the new terms apply? For information on contractual redundancy payments generally, see Practice Note: Contractual redundancy payments. A contract can be made up of all or any of: • express terms • implied terms • imposed terms • incorporated terms For further information, see Practice Note: Types of contractual term in employment. For information on the legal and practical considerations that arise in relation to a change (or purported change) to an employee's terms and conditions of employment, see Practice Note: Changing terms and conditions of employment. An employment contract may, like any other contract, be amended at any time either: • in accordance with the terms of the contract itself • with the agreement of all the parties to the contract The first step is to ascertain the terms of the contract of...
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Law360: On 11 June 2025, a DC Federal Judge denied Russia's application to set aside litigation filed by the financing arm of Yukos Oil Co to enforce a nearly US$5bn arbitral award, saying the Kremlin's jurisdictional objections fell short.
This edition of Employment weekly highlights includes: (1) an EAT decision reminding employers of the need to consider alternative employment in a redundancy situation; (2) a Women and Equalities Committee (WEC) report evaluating the UK’s parental leave system; (3) an EAT decision on the employment tribunal’s approach to striking out a claim; (4) an EAT warning about objecting to applications for extensions of time; (5) the July 2025 edition of the Industrial Relations Law Reports (IRLR), (6) dates for your diary, and (7) other news items of interest to employment practitioners.
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