Making an employee redundant

Avoiding redundancies

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

• seeking applicants for voluntary redundancy and/or early retirement - see the page in this guide on redundancy selection - non-compulsory
• seeking applications from existing staff to work flexibly - see our guide on flexible working - the law and best practice, or use our interactive tool to investigate what kind of flexible working will best suit your employees and you
• laying off casual or contract staff - provided that they are not fixed-term or part-time employees
• recruitment restrictions
• reducing or banning overtime
• filling vacancies with existing employees
• retraining employees and then moving them to other parts of the business
• short-time working or temporary lay-offs - see the page in this guide on redundancies, lay-offs and short-time working

Consulting with employees can help businesses avoid making redundancies. Employees may have different insights into the way the business operates and can offer alternative solutions.

Effective planning can lead to better job security for employees and it can avoid short-term solutions not suited to the long-term needs of your business.

Download advice for employers on training, recruitment and redundancy from the Jobcentre Plus website (PDF, 179K) - Opens in a new window.

Offers of alternative work

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

For an offer to be valid:

• The job must actually be offered to the employee, ie the employee shouldn't have to apply. The offer should therefore be unconditional and ideally 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.

Suitability depends on a number of factors, including pay, job status, location, working environment and hours of work.

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

Different laws govern Northern Ireland. For information call the Northern Ireland Redundancy Payments Helpline.

Improving business performance

Before considering redundancies you should look at your business and see whether there are other things that you can do to improve its performance.

We have a range of guides and interactive tools that can help you do this. For example, for information on ways to improve your business' profitability and save money, see our guides on increase your profitability and save money by using energy more efficiently. For advice on operating in tough market conditions see our guide to managing a business when economic conditions are tough and our section on how to improve your cashflow. You can also introduce new ways of working - see our guide on setting up and developing a new team.

You can also use our interactive tool to assess how well your business is performing or for more information and sources of assistance see our feature on help for businesses.

Subjects covered in this guide

Introduction
• What is redundancy?
• What are lay-offs?
• What is short-time working?
• Avoiding redundancies
• Redundancy selection - non-compulsory
• Redundancy selection - compulsory
• The redundancy consultation process
• Rights of redundant employees
• How to help redundant employees
• Potential problems following redundancy
• Here's how we planned ahead to avoid making redundancies

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